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Privatization of Greece gas system enters final stage

June 10, 2013, 9:19 UTC+3

It can give a fresh impetus to cooperation with Russia

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ATHENS, June 10 (Itar-Tass) - The privatization of the gas sector of Greek economy, which is represented by DEPA and DESFA, enters its final stage and can give a fresh impetus to cooperation with Russia thanks to the participation of the Russian gas major Gazprom and the company Negusneft that belongs to Synthesis Group in this process.

The envelopes with the binding offers for the purchase of DEPA, which Gazprom bids for, and DESFA, which Negusneft wants to buy, are expected to be open in the Greek Privatization Fund (HRADF). Along with them another three investors, including the State Oil Company of Azerbaijan Republic, which bids for DESFA, and two Greek consortiums will bid in a tender for privatization. The holding DEPA is engaged in gas wholesale and gas supplies to major consumers, its subsidiary DESFA owns the Greek gas transportation network.

The study of the bids made in the Greek Privatization Fund, if they are found valid and acceptable in terms of their price, can drag for two weeks, after that the winners of the tender will be announced. The European Commission is to approve the results of the tender within a year.

“We will inform you on the results of the tender, sending a press release,” representative of the Greek Privatization Fund Maria Tsinaridou said earlier.

During long and difficult talks, which were confidential, Russia and Greece refrained from a public assessment of the terms and prospects of possible deals. In the last few months Gazprom CEO Alexei Miller visited Athens thrice for the negotiations over the DEPA privatization. The local media reported that both sides came to compromises. So, the Greek authorities agreed to reduce the sum of the deposit, which a purchaser of DEPA provided before the approval of deal in Brussels, from 20% to 10% of the value of the deal. Meanwhile, Gazprom received the guarantees for the return of the deposit, if the European Commission does not approve the results of the tender. The Russian company also agreed with the republican government on a scheme of the Greek repayment of the debts of the DEPA private consumers that made about 400 million euros, the press reported. Gazprom said that the company is ready to take the steps to reduce the price of gas supplies in Greece after the effectuation of the deal.

The local press reported that Gazprom and the State Oil Company of Azerbaijan Republic are the forerunners in the tender. M&M Gas, which a joint venture of Greek energy companies Motor Oil and Mytilineos, has the lowest chances in the tender. The joint venture offers about 550 million euros for DEPA, which the Russian gas giant offers 900 million euros, according to the Greek media.

In the previous year the DEPA net profit reached 106 million euros. Gazprom accounts for 67% of gas supplies purchased by DEPA, the gas tariffs were reduced by seven percent in 2011. As for DESFA, Negusneft offers a larger sum for it than the State Oil Company of Azerbaijan Republic. However, the positions of the State Oil Company of Azerbaijan Republic are firm thanks to Azerbaijan’s growing role in the supplies of energy carriers to Europe, taking into account the prospect of the Trans-Adriatic Pipeline to pass through Greece. The Trans-Adriatic Pipeline is a Nabucco West rival that in turn directly competes with the Russian gas project South Stream. This month Baku is to decide which one of two gas supply projects to Europe bypassing Russia is more suitable for the country - the Trans-Adriatic Pipeline or Nabucco West. Athens believes that this decision will mainly depend from whether the State Oil Company of Azerbaijan Republic will win in the bidding for DESFA. In the last few months Greek Prime Minister Antonios Samaras and Foreign Minister Dimitrios Avramopoulos visited Azerbaijan. The Greek top officials discussed energy cooperation with the Greek leadership.

Athens repeatedly named the price, which potential buyers will offer, as well as their business proposals in general, including a possible reduction of the prices for Greece’s gas purchase, as decisive factors of the tender. The authorities retained the right not to sell the objects of privatization, if the offers of bidders do not suit them.

The observers noted that the participation of Gazprom and Negusneft in the privatization of the Greek gas system passes amid the pressure on Athens from the European Commission and the United States, which are reluctant to stronger positions of Russian energy companies in Europe. The officials named these news reports as ‘speculations’ and refused to comment on them.

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