DEPA Privatization Near End of Line
The privatization of the Greek natural gas sector (DEPA-DESFA) will reach its final point and a winner is expected by the end of April. Over the past week companies including Gazprom, Sintez, M&M, PPF-Terna and Socar accessed the data room of the company for the last time and also obtained the business plan, details and technicalities concerning Greece's gas market.
Major points that have been revealed thus far both by local governmental sources and by corporate leaks are: DEPA has as its main target to increase the use of gas in the country from 4.5 bcm for 2013 to 7 bcm, at least, by 2020. Concurrently, Greece imports around 60 percent of its gas from Russia, 15 percent from Algeria as LNG, 15 percent Azeri gas via Turkish BOTAS and the rest on spot LNG markets. The main goal as it was noted to the the companies competing, which has also been written as a rule for the competition process, is to further diversify and expand its import sources, a clause that may clash with Gazprom, although the latter has for the moment signed it and adheres to that principle.
Another interesting subject is the business plan of DEPA to expand the use of gas for transportation of vehicles and also to establish an LNG hub in the country named "Aegean LNG" that will be used both for supplying the international market, as well as covering the needs of neighboring countries such as those in the Balkans. Already Sintez has relayed publicly as in a recent interview for Natural Gas Europe that this also constitutes one of its main investment proposals for Greece. DEPA claims that it wants to have the LNG infrastructure ready by 2016 while it also requires from the competitors to invest in the Interconnector Italy-Greece by that period. Already Gazprom and Socar have expressed their interest of using Greece as a transit route for their gas toward the Italian market, thus this interconnector can be said to be beneficial regarding the privatization process. DEPA also claims that it has long term contracts with local costumers, bound until 2020, which will be renewed and will include those with electricity companies related to the M&M Company.
Furthermore, DEPA has informed participants that it is in the process of making future direct buys of gas from Azerbaijan of around 1 bcm, which is 10 percent of the capacity of the Trans-Adriatic pipeline, a move that is strongly backed by the incumbent political administration in Athens, in a move to elevate TAP's role in the ongoing competition of it with Nabucco West for the Southern Corridor route, to be decided in June in Baku by the Shah Deniz consortium. That move certainly increases Socar's interest for the Greek natural sector, although this company is competing solemnly for the gas network manager corporation, namely DESFA.
Overall, the situation seems to be settling soon, with Russian companies Gazprom and Sintez offering substantially larger capital, while Greece would seem content to divide the privatization between a Russian-owned DEPA and an Azeri-owned DESFA, so as to diversify supplies, import significant and much needed privatization gains and investment by both, while backing its claims to have access to both the Southern Corridor (through TAP) and potentially getting access to the South Stream and likely LNG exports from Greek territory from that source.