Two teams forming for DESFA tender, expected this week

Two camps appear to be forming as the main candidates in a new sale offering 66 percent of DESFA, Greece’s natural gas grid operator, whose tender could be announced this Thursday.

Italy’s Snam, emerging as the outright favorite, could bid alone or as part of a consortium with a non-operator co-investor such as the fund SFPI, which recently expressed an interest in DEFSA.

A consortium comprised of Dutch firm Gasunie, as the chief partner, and Belgium’s Fluxys, is expected to be the DESFA tender’s other prime candidate. Fluxys holds a 19 percent stake in the TAP (Trans Adriatic Pipeline) consortium, which could bring Spain’s Enagas, also a TAP shareholder, holding a 16 percent stake, into this bidding team. Marguerite, a European fund focused on infrastructure investments and comprised of capital from France, Italy, Spain, Germany, Poland and the European Investment Bank (EIB), could also join this second group.

France’s GRTgas, which has sought information on the new DESFA tender, could enter as a third bidder, but this would be considered a surprise development.

In the lead-up, the energy ministry yesterday tabled an amendment resolving pending DESFA-related legal issues. Previously, tender offers were limited to certified European operators. This could have prevented certain subsidiaries or SPVs that may be formed especially for the tender from submitting offers.

Bidders are expected to be given a period of at least 35 days to submit non-binding offers. Once the deadline has expired, certification held by participants will be examined. Bidders meeting the tender’s requirements will be invited to submit binding offers, possibly next autumn.

Though the Greek government will be hoping that the sale attracts bids of close to the 400 million-euro offer made by Socar – the winning bidder of the previous DESFA tender, which ended following interventions by the European Commission and Athens – an offer between 300 and 340 million euros appears to be a more realistic prospect for this renewed sale attempt.

TAIPED, the state privatization fund, maintains the right to request improved offers from participants  once binding bids have been submitted.

Given the current rate of developments, a preferred bidder could be named within the current year while a finalized agreement woud probably be signed in 2018.