DEPA Infrastructure board soon, bidders shortlist in June

Corporate revisions at gas utility DEPA, shaped by legislation ratified in December, have just about been completed ahead of the enterprise’s privatization plan.

All that remains, according to sources, is an announcement of the board members at DEPA Infrastructure, one of the new corporate entities established as part of the utility’s transformation.

This announcement is expected to be made within the next one or two weeks. DEPA Infrastructure will be established as an entirely new company with its own tax file number.

DEPA Trade, another new entity emerging from the wider corporate revision, will succeed the existing DEPA utility.

The utility’s other division, DEPA International Projects will, for the time being, remain a subsidiary of DEPA Trade before it is broken away 60 days prior to the submission of bids for its parent company.

Then, as the final step of its process, DEPA International Projects will be merged with EDEY, the Greek Hydrocarbon Management Company, the government has announced.

Nine bidding teams that have expressed official interest for DEPA Infrastructure are currently providing data to the privatization fund TAIPED, expected to shortlist candidates around June, sources estimate.

Meanwhile, DEPA is preparing its video data room as well as financial and technical reports that will be examined and evaluated by investors before they shape their bids. DEPA is expected to complete these reports in May.

IPTO, DEPA Trade, DEPA Infrastucture sales put on hold

Energy-sector privatizations planned for launch in the second quarter, as well as sales already in progress, are being put on hold as a result of the coronavirus pandemic’s impact on the global economy and the plans of the government and privatization fund TAIPED.

Two thirds of Greece’s privatization program this year concerns energy utilities, as energy minister Costis Hatzidakis has noted.

The freeze on plans includes the sale of an additional stake of power grid operator IPTO, which was planned for the second quarter.

State Grid Corp of China (SGCC), already holding a 24 percent share of IPTO and possessing first-offer rights, has expressed an interest to boost its stake.

However, IPTO and SGCC officials have not been able to meet for talks as a result of the extreme conditions. Greece’s deputy energy minister Gerassimos Thomas had planned a trip to China one-and-a-half months ago but was unable to travel as a result of a travel ban imposed by the Chinese government following the coronavirus outbreak in China early this year.

Two privatization procedures for gas utility DEPA’s new entities, DEPA Trade and DEPA Infrastructure, both of which have drawn considerable interest, have also been put on hold.

The DEPA Trade sale attracted nine bidding teams, domestic and international, for its first round, a turnout interpreted as a vote of confidence for the Greek economy. The sale’s first-round expressions of interest could be appraised in the summer.

Kavala gas storage unit an independent grid project

A prospective underground gas storage facility at a depleted offshore gas field in the south Kavala region will operate as an independent grid project, the energy ministry has decided, sooner than expected, through a joint ministerial decision reached following a favorable opinion offered by the Legal Advisor of the State.

Just weeks ago, the ministry had indicated it would soon launch a tender for the project’s development but defer a decision on whether the storage facility would operate as an independent or national grid project. However, a deferral may have led to ambiguity, unsettling investors.

As a next step, RAE, the Regulatory Authority for Energy, will head an effort for the preparation of a cost-benefit analysis in cooperation with the privatization fund TAIPED, the objective being to complete this study as quickly as possible.

Concurrently, TAIPED intends to begin preparations for an international tender offering the project’s development, usage and exploitation rights for a period of up to fifty years.

TAIPED will most likely stage the tender in June, energypress sources informed.

Besides private-sector investors, the tender will also be open, under equal terms, to Greek gas grid operator DESFA and its stake holders.

Local authorities are pushing to make up for lost time and secure financing for this PCI-categorized project through the EU’s Connecting Europe Facility.

 

Market slump a worry for DEPA Trade sale, gov’t holds firm

Privatization fund TAIPED and the energy ministry, already into the early stages of a sale offering the Greek State’s 65 percent of DEPA Trade, a new entity formed by gas utility DEPA for its privatization, are keeping a close watch on international markets, battered amid fears prompted by the coronavirus spread around the world.

The DEPA Trade sale, an emblematic energy-sector privatization, had already been given a first-round deadline extension for non-binding bids, until March 23, prior to the latest coronavirus-related market concerns. But the worsening international conditions, which prompted markets to plunge on Monday, have made the DEPA Trade sale’s officials far more vigilant.

Though an improvement of market conditions by the DEPA Trade privatization’s March 23 non-binding deadline cannot be ruled out, authorities are certainly  concerned for a number of reasons.

DEPA Trade does not offer investors secured WACC levels, as is the case with networks and infrastructure, including DEPA Infrastructure, power grid operator IPTO and distribution network operator DEDDIE/HEDNO. This absence of a fixed yield makes DEPA Trade’s value susceptible to international and domestic market turmoil.

Also, far lower LNG prices at present represent an unfavorable development for DEPA Trade as the company is committed to pipeline natural gas import agreements with take-or-pay clauses. This restricts the firm’s ability to choose.

In addition, investors, local and foreign, inevitably revise investment plans, or, at best, wait, when faced by overwhelming situations such as the coronavirus outbreak.

Furthermore, any market-slump period is not a good time to sell assets. Should markets remain unsettled for an extended period, the market value of DEPA Trade will be impacted.

The government plan remains unchanged, the DEPA Trade privatization still being at an early stage, energy ministry officials told energypress.

 

Italy’s Snam, Italgas face off in DEPA Infrastructure sale

Snam, Italy’s gas grid operator, and Italgas, the neighboring country’s biggest natural gas distribution company, have emerged as rivals, despite sharing common interests, in a Greek privatization offering a full stake in DEPA Infrastructure, a new entity formed by Greece’s gas utility DEPA.

The Snam group holds a 13.5 percent stake in Italgas. Also, the two companies have a common key shareholder, CDP Reti, holding a 28.98 percent stake in Snam and a 26.05 percent share of Italgas.

The showdown between Snam and Italgas could end up leaving both bidders out of the DEPA Infrastructure privatization, whose deadline for first-round expressions of interest expires today following a slight extension.

The participation of both players in the DEPA Infrastructure privatization would represent a violation of the sale’s terms, privatization fund TAIPED has already pointed out following a related query.

Fully aware of the situation, Snam has sought a solution. The Italian firm could form another consortium as it had done for the sale of Greek gas grid operator DESFA. Snam led a consortium, Senfluga, joined by Fluxys and Enagas, for the acquisition of a 66 percent stake of DESFA.

Two major US funds, KKR and Blackrock, as well as Australia’s Macquarie, are among the field of players tipped to submit expressions of interest today. Two other funds, both undisclosed, one from China, the other from the Middle East, could also participate. Additional entries have not been ruled out.

Operating status decision on Kavala gas storage unit later

The energy ministry is considering to soon launch a tender for the development of an underground gas storage facility at a depleted offshore gas field in the south Kavala region and defer a crucial decision on whether the facility will operate as an independent or national grid project for a latter date, energypress sources have informed.

The ministry wants to move ahead as fast as possible to meet EU funding deadlines for this project, on Brussels’ PCI list.

Prospective investors should not be concerned about the impact of this decision on their investment plans as the project’s status, whether independent or part of the national grid, will not affect the tender’s participation terms and conditions, energy ministry sources contended.

However, this element of ambiguity could unsettle investors and cause further delays, pundits have warned.

The pending decision on whether to classify the facility as an independent or national grid project appears to be the reason why the energy ministry has delayed issuing a related ministerial decision.

A ministerial decision is needed to clarify legal matters concerning the project as well as its pricing policy, regulated earnings and minimum yield. Privatization fund TAIPED needs this information to launch the tender.

DEPA Infrastructure sale luring bidders, deadline Friday

The government and privatization fund TAIPED are expecting strong investor interest in the full sale of gas utility DEPA’s new entity DEPA Infrastructure, a procedure whose deadline for non-binding expression of interest expires this Friday at 5pm.

Authorities will not offer a deadline extension despite requests for more time, sources informed.

Italy’s Italgas, France’s Engie, Spain’s Reganosa as well as two major US funds, KKR and Blackrock, and, possibly, Australia’s Macquarie, are believed to be among the field of players eyeing the DEPA Infrastructure privatization. Senfluga, a consortium made up of Greek gas grid operator DESFA shareholders, is also considering participating in what should be a last-minute decision following related preparations.

Italgas, Italy’s biggest distribution network operator and third biggest in Europe, is believed to have held talks with fellow Italian company Eni for the acquisition of a 49 percent stake of gas distributor EDA Thess, covering the Thessaloniki and Thessaly areas. This stake is currently held by Eni subsidiary Eni Gas e Luce.

France’s Engie, also eyeing other opportunities in the Greek market, has partnered with Energean Oil & Gas and GEK-Terna with the intention of jointly bidding for an underground gas storage facility to be developed at a depleted offshore gas field in the south Kavala region.

TAIPED, the privatization fund, is offering DEPA’s 65 percent share in DEPA Infrastructure while Hellenic Petroleum ELPE is selling its 35 percent stake.

RAE given 5 months to set Kavala underground gas storage charges

RAE, the Regulatory Authority for Energy, has been given five months to determine the pricing policy, regulated earnings and WACC for a planned underground gas storage facility at a depleted offshore gas field in the south Kavala region, according to an imminent joint ministerial decision, energypress understands.

The launch date of the project’s tender will depend on funding for project studies through the EU’s Connecting Europe Facility (CEF) program. This essentially means that the privatization fund TAIPED will need to officially launch the project within the first half of this year to avoid missing out on CEF funds.

The project’s investment cost is estimated at between 300 and 400 million euros.

France’s Engie as well as Energean Oil & Gas and GEK-Terna have formed a three-member consortium named Storengy in anticipation of the tender. DESFA, the gas grid operator, is also expected to participate in the tender.

The project, promising gas storage capacity of 360 million cubic meters, is considered vital for Greece as it will be able to maintain strategic reserves for considerable time periods.

Its development will help boost the performance level and strategic role of the Revythoussa LNG terminal just off Athens, and the prospective Alexandroupoli FSRU in the country’s northeast, as these will be able to supply the wider region greater gas quantities via the IGB and TAP gas pipelines.

The south Kavala project has been classified as a PCI project, offering EU funding opportunities, seen as crucial for the investment’s sustainability, according to some analysts.

South Kavala gas storage facility facing tough PCI schedule

Despite being regarded as pivotal infrastructure for the country’s energy sector, a prospective underground gas storage facility at a depleted offshore gas field south of Kavala has remained stagnant in recent months, prompting fears that the required momentum needed for utilizing related wider developments could be lost.

The project’s inclusion on the EU’s PCI list offers financing opportunities, which, according to certain analysts, are crucial for the investment’s sustainability. However, this privilege comes with a strict schedule that must be maintained.

If the underground gas storage project is to qualify for funding offered by the EU’s Connecting Europe Facility (CEF) program, then authorities must submit a related application within 2020.

This essentially means a project promoter must be selected to prepare a business plan and apply for financing, all within the second half of this year.

Also, a tender for the storage facility’s privatization will need to be staged by privatization fund TAIPED by the end of the first half, experienced officials have pointed out.

A joint ministerial decision establishing a legal framework for the facility’s operation will need to precede the sale procedure. In addition, RAE, the Regulatory Authority for Energy, must, prior to the privatization, establish general guidelines determining pricing policy, regulated earnings, WACC, and a minimum capacity vacancy level that investors will need to maintain for national security reasons.

The chances of CEF financing are now starting to tighten up as the month of January is just about gone and there is no sign of a joint ministerial decision. When delivered, it should serve as a catalyst for ensuing initiatives.

 

 

 

 

 

DEPA Trade sale launch near, Middle East tension a concern

The launch of a privatization procedure offering 100 percent of DEPA Trade, a new entity established by gas utility DEPA for the sale, is near, as long as the heightened tension in the Middle East does not lead to extreme events and turbulent market conditions.

Officials at privatization fund TAIPED and the energy ministry are aiming for a start before the end of January, while, according to some sources, the sale’s launch may take place at the end of next week.

The heightened tension in the Middle East is a concern for the organizers of this privatization as extreme developments could unsettle oil and gas markets to an extent that would render the current period unsuitable for the DEPA Trade sale. If so, officials may need to delay the sale’s launch.

TAIPED and Hellenic Petroleum (ELPE), holding a 35 percent stake in DEPA, are close to reaching an agreement on the sale process of this stake should ELPE not emerge as the sale’s winning bidder. The petroleum group intends to seek a full acquisition in the DEPA sale. The details of a clause requiring ELPE to sell its stake, if the group fails to submit the winning bid, are now being worked on.

The agreement between TAIPED and ELPE will need to be endorsed by the boards of both entities.

 

 

DEPA, ELPE, south Kavala gas storage privatizations in 2020

The privatizations of gas utility DEPA – through two separate tenders offering the utility’s trade and infrastructure divisions that have resulted from a split designed for the sale – as well as the Greek State’s 35.48 percent stake in Hellenic Petroleum (ELPE), stand as the major sales planned by privatization fund TAIPED in 2020.

TAIPED also plans to push ahead with a tender for the conversion of a depleted natural gas field in the offshore South Kavala region into an underground gas storage facility in the New Year.

The DEPA and ELPE privatizations are expected to raise one billion euros from a target of 2.4 billion euros set for 2020. If achieved, this amount will represent a new privatization revenue record for TAIPED.

The DEPA Infrastructure tender is already in progress. Participants are due to express non-binding interest by February 14. The DEPA Trade tender is expected to be launched within January. TAIPED is confident both these sales can be completed in 2020.

A planned privatization to offer a 30 percent stake in Athens International Airport ranks as TAIPED’s other major sale plan for 2020. The Greek State currently holds a 55 percent stake in Athens International Airport S.A. or AIA, the airport authority that owns and manages Athens International Airport.

DEPA Infrastructure sale first-round deadline set for Feb.14

Interested buyers of DEPA Infrastructure, a new entity emerging from a split at gas utility DEPA, have until February 14 to express non-binding first-round interest in its sale, offering the entire stake, the privatization fund TAIPED has announced.

TAIPED is selling the Greek State’s 65 percent stake and Hellenic Petroleum has contributed its full 35 percent stake.

Strategic investors as well as investment funds seeking strong yields have already displayed strong interest in the sale, TAIPED sources have informed media.

Procedures concerning the privatization of DEPA’s other new entity, DEPA Trade, are expected to begin in the first quarter of 2020. It remains unclear whether ELPE will contribute its 35 percent DEPA stake to this sale. ELPE has noted it will seek to take full control of this new company by acquiring the other 65 percent.

Greek groups, all involved in the energy sector, and foreign groups, some of which have already entered the country’s energy market, are interested in DEPA Trade, TAIPED sources added.

Ministry amendment to unblock Kavala storage legal complexity

The energy ministry has prepared a legislative amendment needed to overcome a legal complexity that has emerged concerning the development of an underground gas storage facility in the offshore South Kavala region through the utilization of a depleted natural gas field.

The amendment, which could be submitted to parliament today, will not lead to any fundamental changes concerning the project but purely focuses on resolving the legal obstacles obstructing its development, sources informed.

Once ratified, this amendment will pave the way for the publication of a related joint ministerial decision in the government gazette ahead of the asset’s eventual privatization.

Meanwhile, RAE, the Regulatory Authority for Energy, needs to prepare general guidelines determining the project’s pricing policy, regulated earnings, WACC level, as well as a minimum capacity level that will need to be kept vacant by the project’s investor for national energy security reasons.

RAE will have three months to prepare the guidelines once the joint ministerial decision has been published in the government gazette.

TAIPED, the privatization fund, has received an amount worth 1.6 million euros from the European Commission’s Connecting Europe Facility (CEF) to finance engineering studies required for the underground gas storage facility ahead of the privatization tender. This financial development was included in a updated Asset Development Plan (ADP) presented by TAIPED a fortnight ago. The investment’s cost is estimated between 300 and 400 million euros.

France’s Engie, Energean Oil & Gas and GEK-Terna have formed a three-member consortium named Storengy in anticipation of the tender. DESFA, the gas grid operator, is also expected to participate in the tender.

DEPA Infrastructure sale to be announced mid-December

Privatization fund TAIPED is preparing swift privatization action at gas utility DEPA to follow the government’s ratification of a restructuring plan at the company that will place for sale two new corporate entities, DEPA Trade and DEPA Infrastructure, emerging through this process.

A tender offering investors the Greek State’s 65 percent of DEPA Infrastructure – resulting from the Greek State’s equivalent stake in DEPA – will be announced no later than December 15, according to energypress sources.

Hellenic Petroleum ELPE’s 35 percent stake – resulting from the Greek State’s equivalent stake in DEPA – is expected to be included in the DEPA Infrastructure sale, sources noted. The petroleum group has indicated it is not interested in maintaining interests in DEPA Infrastructure. If this is so, then the potential buyer or buyers of DEPA Infrastructure will become full owner.

DEPA Infrastructure is the full owner of Attiki gas distributor, covering the wider Athens area, and DEDA, covering the rest of Greece. DEPA Infrastructure also holds a 51 percent stake in distributor EDA Thess (Thessaloniki and Thessaly). Italy’s ENI is the minority partner in this venture.

DEPA Infrastructure, through all its interests, has lined up a five-year investment program worth 250 million euros. Revenues at DEPA Infrastructure are regulated and worth a total of approximately 130 million euros.

Italy’s Italgas and Germany’s E.ON are believed to be among the potential bidders for DEPA Infrastructure. Belgium’s Fluxys and Spain’s Enagas, both part of a three-member consortium controlling Greek gas grid operator DESFA, may also participate in the DEPA Infrastructure sale.

The announcement of a sale procedure for DEPA Trade will follow and is expected by the end of January.

ELPE is not expected to offer its 35 percent stake to this sale, meaning bidders will most probably be bidding for the Greek State’s 65 percent.

The Mytilineos group, Motor Oil and a partnership comprised of Copelouzos and KKCG, the Czech company holding a stake in Greek lottery company OPAP, are seen as likely participants in the privatization fund’s ELPE Trade sale. International players ENI and Edison have also been mentioned by pundits.

 

ELPE privatization headed for delay, lenders have approved

A privatization plan for part of the Greek State’s 35.48 percent stake in Hellenic Petroleum (ELPE) will be delayed for next year as current market conditions are not favorable, while the procedure could even be reassessed from scratch, sources have informed.

This delay, sources said, has already been approved by the country’s lenders, who have admitted the ELPE privatization has never represented a restructuring plan for the Greek economy, but, instead, is a cash-collecting initiative incorporated into the wider effort to reduce public debt.

A government plan to sell the Greek State’s ELPE stake through the Athens bourse was recently reported as finalized and ready for implementation next month.

The Latsis group’s Paneuropean Oil, ELPE’s main shareholder with a 45.5 percent stake, has been allowed a more influential administrative role at ELPE since the summer’s Greek election brought in a new government.

Energy minister Costis Hatzidakis, speaking in Greek Parliament, has noted there is no intention to sell the Greek State’s entire ELPE stake. It remains unclear what the level of the Greek State’s percentage in ELPE could be following the privatization.

TAIPED, the privatization fund, holds the Greek State’s stake in ELPE. A sale of this stake through the bourse would require a legislative revision.

Concurrent DEPA infrastructure, trade unit sales being planned

Privatization fund TAIPED plans to stage concurrent tenders offering stakes of up to 65 percent in DEPA Trade and DEPA Infrastructure once legislation has been ratified to enable gas utility DEPA’s split into these two new corporate entities.

The Greek State holds a 65 percent stake in DEPA, while Hellenic Petroleum ELPE holds the other 35 percent.

The Greek State’s entire stake in DEPA – both infrastructure and trade – could be offered to investors, energy minister Costis Hatzidakis noted yesterday.

A DEPA draft bill enabling the sale of the Greek State’s entire share will be submitted to Greek Parliament within October, along with power utility PPC revisions and a wider framework for more extensive energy market liberalization, the minister added.

The level of the Greek State’s DEPA stake to be privatized will be determined once ELPE decides on the future of its 35 percent share in the gas utility.

It is believed ELPE could sell its stake in DEPA Infrastructure and seek control of the gas utility’s trading interests.

Ministry closing in on Kavala underground gas storage model

The energy ministry is close to deciding on a business model for a prospective underground gas storage facility in the offshore South Kavala region, the objective being to ensure the investment’s sustainability without overburdening consumers.

Numerous alternatives have been examined so far but a model applied in France and Italy appears to be the most favored, energypress sources informed.

The content of an upcoming joint ministerial decision is now at a mature stage following efforts that have now lasted nearly two years, energy ministry officials noted.

The ministerial decision will determine the licensing, development and exploitation terms for the project, 30km south of Kavala, where a depleted natural gas field is planned to be converted into an underground gas storage facility.

Swift progress is needed as Greece will need to request EU financing for the project, on the PCI list, in 2020. If the request is delayed until 2021 then the available funds could be severely diminished and absorbed by other European PCI-status projects.

The underground gas storage facility is vital for Greece’s electricity grid given the anticipated increase of gas consumption to be prompted by the planned development of combined cycle power plants. Five market players, Mytilineos, Elpedison, GEK TERNA, Elval Halkor and Karatzis, have expressed interest to develop such units.

Privatization fund TAIPED will take over proceedings for a tender once the project’s business model has been decided. The investment is expected to reach between 300 and 400 million euros. Its storage capacity is estimated at between 360 and 720 cubic meters.

Greece is the only EU member without an underground gas storage facility. All other member states maintain facilities covering at least 20 percent of their annual gas consumption needs. Many more similar facilities are currently being planned around Europe.

DEPA privatization bill later this month with majority stakes for trade, networks

Gas utility DEPA privatization plan revisions will be forwarded to parliament later this month, instead of within the first few days, as was previously believed.

The DEPA revisions will be included in a draft bill to also feature an order detaching power utility PPC from public sector terms concerning competitive procedures. This combined move has played a role in the slight delay.

The bulk of DEPA’s revised privatization plan is ready but certain legal details still need to be completed. Also, TAIPED, the privatization fund, and Hellenic Petroleum ELPE, holding a 35 percent stake in DEPA, need to be fully informed.

At this stage, it appears that majority stakes will be offered in DEPA’s trading and infrastructure interests, while the Greek State, now holding a 65 percent stake in the gas utility, will retain a majority stake in international projects.

This overall DEPA plan maintains energy ministry intentions unveiled in mid-September for the establishment of three divisions respectively representing trade, networks and international projects. It seems the government will probably sell the Greek State’s entire 65 percent stake concerning trade and networks.

Aggressive DEPA privatization in making, draft bill next month

Gas utility DEPA’s state-controlled era appears to be reaching its end as the energy ministry is looking to privatize the Greek State’s entire stake in the utility’s trading and infrastructure interests.

The Greek State – via privatization fund TAIPED – holds a 65 percent stake in DEPA, with Hellenic Petroleum ELPE owning the other 35 percent.

DEPA is at the forefront of the recently elected conservative New Democracy government’s privatization program, sources informed.

The Greek State’s interests in DEPA Trade and DEPA Infrastructure – the two new corporate entities formed through a DEPA spit plan engineered by the former Syriza government’s energy minister Giorgos Stathakis – will be completely withdrawn, the sources noted.

The former government was planning to offer a majority stake of DEPA Trade followed by a minority stake of DEPA Infrastructure.

Required legislation needed to proceed with the revised DEPA plan will be attached to a draft bill concerning changes at power utility PPC, expected in parliament early next month.

The DEPA legislative revisions will enable a complete transfer of the Greek State’s 65 percent stake in DEPA Trade to the privatization fund. Current law permits the transfer and sale of 50 percent plus one share.

The transfer to TAIPED of a 66 percent share of the Greek State’s stake in DEPA Infrastructure is also being planned, according to some sources, while others have not ruled out a full 100 percent transfer. The previous government had ratified law limiting DEPA Infrastructure’s privatization to less than 49 percent.

Sources have informed of yet another change in the making that entails the establishment of a new company and transfer, to it, of DEPA’s stakes in pipeline projects such as the IGB, Poseidon, East Med and IGI. Current law obligates such a company to remain a part of DEPA Infrastructure.

All these changes are expected to be finalized within the next few days.

Energy ministry pushing for swift completion of DEPA privatization

Swift completion of gas utility DEPA’s privatization procedure is a key objective for the energy ministry, whose choice of sale model will be strongly influenced by the time needed for implementation.

Opting to continue with the previous Syriza government’s unfinished DEPA sale procedure, instead of adopting a more recent New Democracy administration proposal that would entail the establishment of a holding company, appears to be the likeliest way to go, energy ministry sources have underlined.

Energy ministry and privatization fund TAIPED officials, along with legal consultant Potamitis Vekris and financial adviser UBS, held a meeting yesterday to discuss the DEPA privatization.

The previous government’s DEPA sale plan, involving a company split designed to offer investors separate stakes in two new entities, DEPA Trade and DEPA infrastructure, appears to be the favored option at this stage, with one big difference, this being to offer majority 65 percent stakes in each of the two new companies.

Under the Syriza version, investors would have been offered a majority 50.1 percent stake of DEPA Trade and 14 percent minority stake of DEPA infrastructure.

The government’s newer and less likely option, entailing the establishment of a holding company as a platform for two to three companies representing DEPA’s trading, network and international activity interests, has not been completely ruled out.

The recently elected government wants the DEPA privatization to be among its first sales. It intends to launch a tender in autumn for completion as soon as possible.

Slight delay, to early 2020, likely for Kavala gas storage tender

A tender for the utilization of a depleted natural gas field in the offshore South Kavala region as an underground gas storage facility appears headed for a slight delay and could be launched in early 2020, instead of late 2019, as a result of a deadline extension, from August 28 to September 9, granted to participants of a preceding tender looking to appoint a technical consultant for the project.

Besides the preliminary tender’s deadline extension, granted by the privatization fund TAIPED, a still-undelivered co-ministerial decision to determine the operating regulations of the storage facility is another matter that has increased the likelihood of a delay in the project’s competitive procedure. Even so, a launch by late 2019 has not been entirely ruled out.

The technical consultant will be tasked with preparing the tender’s details and offering TAIPED advice on the level of appropriateness of the plan to convert the depleted natural gas field into a gas storage facility, its equipment and interconnection needs, and other matters.

France’s Engie, Energean Oil & Gas and GEK-Terna have formed a consortium named Storengy in anticipation of the project’s tender.

 

DEPA leadership set for appointment, new privatization model near

The imminent appointment of Konstantinos Xifaras, a former managing director at gas grid operator DESFA, as chief executive of gas utility DEPA, and Giannis Papadopoulos, previously the managing director at venture capital firm Attica Ventures, as DEPA’s new company president, marks the first step towards a revision of the utility’s privatization plan, including related legislation.

Privatization fund TAIPED is expected to meet today or tomorrow to endorse DEPA’s new two-pronged leadership. An extraordinary shareholders’ meeting will immediately follow at DEPA for the duo’s approval.

The country’s previous Syriza administration had ratified legislation for a DEPA split plan entailing the establishment of two new corporate entities, DEPA Trade and DEPA Infrastructure. The plan was to sell a majority stake of DEPA Trade followed by a minority 14 percent stake in DEPA Infrastructure.

However, the recently elected conservative New Democracy government’s energy minister Costis Hatzidakis has implied a more aggressive DEPA sale plan will be adopted to offer investors majority stakes in both the utility’s trade and network divisions.

 

Upcoming endorsement of new DEPA leadership first of 3 steps

The privatization fund TAIPED’s anticipated approval, on August 30, of the new leadership at gas utility DEPA represents the first of three key step leading towards a new era for the company.

Earlier this month, Konstantinos Xifaras, a former managing director at gas grid operator DESFA, was named for the equivalent post at DEPA, while Giannis Papadopoulos, managing director at venture capital firm Attica Ventures, was announced as the gas utility’s new company president.

DEPA shareholders will immediately follow up with an extraordinary meeting to offer their approval of the company’s new two-pronged leadership.

Around the same time, a second key step is planned to be taken in the form of an amendment to be submitted to Parliament for a revision of the previous Syriza government’s DEPA split plan. It had envisioned the establishment of two new corporate entities, DEPA Trade and DEPA Infrastructure, as a prelude to the sale of a 50.1 percent stake in the former and a 14 percent stake in the latter.

The recently elected conservative New Democracy government appears determined to pursue a more aggressive DEPA sale policy that will offer majority stakes in both the utility’s trade and network interests. However, finalized decisions on a new company model, the third key step, have yet to be made.

Kavala underground gas storage tender later this year

A tender concerning the utilization of a depleted natural gas field in the offshore South Kavala region as an underground gas storage facility is expected to be launched by the privatization fund TAIPED towards the end of the year.

The privatization fund has informed the energy ministry on the progress of preparations, energypress sources informed.

A month ago, on July 12, TAIPED launched a tender seeking specialized preliminary services for the project.

The winning bidder of this initial procedure, expiring August 28, will need to prepare the technical details of the project’s eventual tender and offer consultancy to the privatization fund on the prospective underground gas storage facility’s feasibility and demands.

The recently appointed energy minister Costis Hatzidakis has made clear his intent to utilize the depleted natural gas field.

France’s Engie, GEK-Terna and Energean have formed a consortium, named Storengy, in anticipation of the project’s tender.

Greek gas grid operator DESFA is also believed to be eyeing the project, included in the EU’s list of PCI projects.

The project’s budget is estimated at between 300 and 400 million euros, while its storage capacity could end up being anywhere between 360 and 720 million cubic meters, as much as 10 percent of the country’s annual natural gas consumption.

The prospective underground gas storage facility is regarded as infrastructure that will complement – rather than compete against – the country’s existing LNG terminal on Revythoussa, an islet just off Athens, as well as a prospective FSRU in Alexandroupoli, northeastern Greece, helping establish Greece as an energy hub.

More aggressive DEPA privatization plan considered

The recently appointed energy ministry appears headed towards a more aggressive privatization policy on gas utility DEPA that could offer investors majority stakes in both its trading and network divisions.

All possible scenarios will be examined at a meeting today between energy minister Costis Hatzidakis and the leadership of privatization fund TAIPED in search of a new plan.

It would require a legislative amendment in place of a previous plan set forth by the minister’s predecessor Giorgos Stathakis prior to July’s election.

That plan entailed a split of DEPA’s infrastructure and trade divisions. Investors would have been offered a 50.1 percent majority stake in the commercial division and, at a latter stage, a minority 14 percent share in the infrastructure division. Such a plan has not been ruled out, but, if eventually picked, it would be revised.

The sale of a majority share in the networks, as is being considered by the new ministry, would offer managerial rights to investors in an effort to boost interest in the sale as well as the sale price.

Besides a revised DEPA split plan, Hatzidakis, the energy minister, is believed to be considering the establishment of a holding company that would house three subsidiaries representing the utility’s commercial, network and international project interests. Investors would be offered stakes in the commercial and network entities.

 

Gov’t examining DEPA options, including holding co. model

The newly appointed energy ministry is examining alternatives for the sale of gas utility DEPA, one of these being an older plan proposed by the privatization fund TAIPED for the establishment of a holding company that would house three subsidiaries representing the utility’s commercial, network and international project interests.

This plan would involve offering stakes in the commercial and network subsidiaries to investors while the international projects division would remain in the holding company portfolio.

The privatization fund’s proposal, presented about a year-and-a-half ago, foresaw the sale of a majority stake in the commercial entity and a minority stake in the network company.

This plan differs greatly to a DEPA split plan legislated by the previous Syriza government in March.

Contrary to the Syriza effort, the holding company plan entails a partial, not full, break from DEPA of the aforementioned business activities.

Meanwhile, decisions on details concerning a Hellenic Petroleum ELPE sale relaunch have not been reached. The new energy ministry will first need to hold talks with Paneuropean Oil, a member of the Latsis group, holding a 45.5 percent stake in ELPE. It remains unclear whether Paneuropean Oil would be willing to participate in any renewed sale attempt for ELPE.

On Saturday, Prime Minister Kyriakos Mitsotakis indicated a new ELPE sale procedure would be launched following the previous effort’s failure to produce a result. The Greek State offered 20 percent of its 35.48 percent share in ELPE and Paneuropean Oil made available 30.1 percent of its 45.47 stake.

It remains unclear if investors would consider buying the Greek State’s 35.48 percent stake held in ELPE should Paneuropean Oil refuse to take part in the sale.

 

 

 

TAIPED awaiting ND position on ELPE, DEPA privatizations

The privatization fund TAIPED is awaiting the newly elected conservative New Democracy government’s strategy on energy sector privatizations so that it can reshape, from scratch, as it appears, the sale procedures for Hellenic Petroleum ELPE and gas utility DEPA.

The newly appointed energy minister Costis Hatzidakis may have highlighted the importance of these two privatizations during proceedings at the ministry’s recent handover ceremony, describing both sales as agenda priorities. However, everything concerning both will need to be placed on hold as emphasis must currently be placed on the troubled power utility PPC and the effort to find a successor for chief executive Manolis Panagiotakis, who resigned from his post at the state-controlled company shortly after the ND’s victory in the July 7 election.

TAIPED officials also need to stage a first meeting with finance minister Hristos Staikouras, during which talks on the shape of the new ND government’s privatization strategy preferences can be discussed.

ELPE’s future administrative shape, following the recent failure of an initial privatization effort, remains in the dark. Pundits have already ruled out the possibility of a repeat of this sale effort – that is, a concurrent sale of stakes by the petroleum group’s two main shareholders, the Greek State, holding 35.5 percent of ELPE, and the Latsis Group’s Paneuropean, holding 45.5 percent. It is also unknown, if not doubtful, if Paneuropean will be willing to participate in any new ELPE sale procedure.

For the time being, ELPE’s administration is focused on the preparation of the group’s first-half results, expected to be officially reported in late August, as well as an imminent approval in Greek Parliament of hydrocarbon exploration and production licenses secured – as part of a consortium also involving ExxonMobil and Total – for two offshore blocks west and southwest of Crete.

All is currently quiet along the DEPA front. The ND party, according to party sources during the lead-up to the elections, believes the gas utility must be privatized as one entity, not two, through a split of its commercial and infrastructure divisions, as was envisioned by the previous leftist Syriza government.

The DEPA-related intentions of ELPE, holding a 35 percent share of the gas utility, will be pivotal.

 

 

 

 

 

PCI hopes for underground gas storage boosted by late effort

NEWS UPDATE: 

Greek energy ministry officials have made a successful last-ditch effort ahead of this Sunday’s elections that boosts the country’s chances of keeping on the EU’s PCI list an underground gas storage facility in the offshore South Kavala region, planned through the development of a depleted natural gas field, energypress sources have informed.

An FSRU in Alexandroupoli, northeastern Greece, will also be on the PCI list, enabling favorable funding terms, the sources added.

Prior to this latest development, energy ministry officials assured that problems concerning the South Kavala project’s place on the PCI list would be overcome, while admitting the project had been negatively appraised by Brussels.

Earlier today, energypress reported: 

A project entailing the development of a depleted natural gas field in northern Greece’s offshore South Kavala region as an underground gas storage facility appears likely to be removed from the European Union’s PCI list, a status enabling favorable funding.

Delays and the country’s early elections appear to have taken their toll and are believed to be key reasons behind the project’s likely removal from the PCI list.

The underground gas storage facility has been negatively reviewed by EU authorities amid procedures leading to the determination of a new and revised PCI catalogue for 2020-2021, energypress sources have informed.

Not all hope has been lost. Final decisions by EU authorities will be reached in October, which gives Greek officials some time to present their case in favor of the project’s PCI-list inclusion.

The asset’s ownership, along with the responsibility for its utilization, have been transferred to the privatization fund TAIPED, which has significantly delayed related initiatives as it obviously does not consider the project to be a top-priority issue.

The project’s budget is estimated at between 300 and 400 million euros, while its storage capacity could end up being anywhere between 360 and 720 million cubic meters, as much as 10 percent of the country’s annual natural gas consumption.

France’s Engie, as well as Terna and Energean, have formed a consortium to bid for the project whenever a tender is staged.

PPC rebound for €1bn EBITDA by 2022 possible, chief asserts

The worst is over for the power utility PPC as the corporation has the potential to rebound from disappointing financial results at present to an operating profit (EBITDA) of one billion euros three years from now, chief executive Manolis Panagiotakis supported in an interview with energypress.

The utility’s return to positive results could lure investors who would be willing to pay as much as 500 million euros for a 17 percent stake and become a strategic partner who would further reinforce the enterprise, Panagiotakis noted.

Such an amount could end up at state-controlled PPC rather than the TAIPED privatization fund if an equity capital increase is chosen over a direct sale of a 17 percent stake by the fund, Panagiotakis explained.

The PPC boss supports the entry of a strategic partner, as he has made clear in recent times.

The utility’s current administration should remain in place regardless of the results of the upcoming elections this Sunday, as is proper for any listed company. Panagiotakis stressed. The main opposition New Democracy is well ahead in polls.

 

Energy minister calls for DEPA administration change

Energy minister Giorgos Stathakis has called for all necessary measures to be taken for the immediate replacement of the administration at gas utility DEPA, a development prompted by the government’s decision to stage early elections on July 7.

The new DEPA administration will assume the task of maintaining smooth operations at the gas company for a brief period until the country’s next government appoints a new DEPA administration of its choice.

Stathakis made the call for a leadership change at DEPA in a letter to the privatization fund TAIPED and Hellenic Petroleum ELPE, holding a 35 percent stake in the gas utility.

In the letter, addressed to TAIPED’s Rihardos Labiris and ELPE chairman Stathis Tsotsoros, the energy minister calls for the immediate replacement of DEPA Chief executive Dimitris Tzortzis (photo), proposing Velissarios Dotsis, a former DEPA chief, as an interim boss.