• Natural Gas News

    Greek Gas Privatizations and the SINTEZ Group

    old

Summary

Sintez Group CEO Andrey Korolev says his firm believes that substantial investments are needed in Greece to expand the market both domestically and regionally, which it can provide. Further, Sintez is optimistic for the creation of an LNG market in Greece and remains committed in the privatization competition and backs diversification natural gas projects

by: Ioannis Michaletos

Posted in:

Natural Gas & LNG News, News By Country, , Greece, Top Stories

Greek Gas Privatizations and the SINTEZ Group

The CEO of Sintez Group, Andrey Korolev, provides both interesting and revealing answers regarding the ongoing competition for the Greek natural gas sector privatization, in which Negusneft, a Sintez subsidiary, participates. Sintez believes that substantial investments are needed in Greece, which it can provide, in order to expand the market not only domestically but also in regional terms.

Further, Sintez is optimistic for the creation of an LNG market in Greece, while it expresses its dissatisfaction with an “asymmetrical approach” taken by the Greek privatisation agency. Lastly it remains committed in the privatization competition and it backs diversification natural gas projects, such as that of the Trans-Adriatic Pipeline (TAP).

“Let me say that we fully support projects that would help to develop and diversify Greece’s natural gas supplies”.

Recently Sintez has talked about plans for substantial investments regarding the Greek companies DEPA and DESFA. Would you be able to elaborate on your future plans for the Greek market?

“First of all, the reason why we are interested in Greece is because we think that it has the potential to become a new natural gas transit hub for Europe, and we believe that DEPA and DESFA can play a meaningful role in that transformation. Of course, In order for that to happen, a number of large-scale investment projects will need to be undertaken.

As far as we are aware, DEPA’s current investment programme envisions spend of approximately 1 billion euros over a period of about 5 years. We think that this is not sufficient and, in the case that we are successful in our bid for both assets, would aim to make around 3 billion euros of direct investments, part of which would be used to modernize infrastructure and build new pipelines to connect Greece with neighbouring countries, such as the Former Yugoslavian Republic of Macedonia, Italy and Albania, for tighter integration into the southeast European energy markets.

In addition to that, existing pipelines can also be re-engineered to allow for reverse flows. Furthermore, we see the potential for increasing LNG deliveries. Greece already has one LNG terminal, at Revithoussa, but there are proposals for a second one to be built and we support such plans.”

For a brief period there was talk in Greece that Sintez was about to exit the competition for the privatization, claims that were denied by your company. How do you seen the privatization process unfolding and do you have any second thoughts on that?

“SINTEZ remains in the race and is still very much interested in DEPA and DESFA. We have already publicly announced before that SINTEZ is not satisfied with the asymmetrical approach taken by the Greek privatisation agency. All of the companies bidding are put at a disadvantage to the seller of these assets. The terms of the sale of DEPA are now set up in such a way that all the risk associated with the deal lies completely on the shoulders of the companies interested in acquiring it’’.

Does the agreement recently reached between Greece-Albania-Italy, regarding the TAP project, have any effect on the business plans that Sintez has in mind for DEPA-DESFA?

“Firstly, let me say that we fully support projects that would help to develop and diversify Greece’s natural gas supplies. The TAP project is just one such project. Whether it will have any tangible effect on our business plans, there are no reasons to believe that this project would be an obstacle for our investment in Greece’’.

 Is Sintez considering of using the Greek companies as "hubs" for LNG trading in future expanding markets, especially in Asia? Greek ship-owners are steadily investing in LNG vessels lately, whilst the EU has decided to promote the construction of more than 30 LNG terminals over the next 15 years. In what case would Sintez consider wider involvement in the Greek market, for example in Port facilities, shipping companies and small islands as gas storages?

“We think the decision to promote the construction of more LNG terminals across Europe is indeed a step in the right direction. As we have already said, in the near term we support the plan to carry out a feasibility study to build a second LNG terminal in Greece, since we believe there is a lack of storage capacity at the first terminal. Our growth strategy is focused primarily on the Balkan region so our bid for DEPA-DESFA is a natural choice for us.”

Do you assess any further delay in the DEPA-DESFA privatization process due to the recent change of the TAIPED agency's CEO?

“We consider it unfortunate that the deadline has once again been extended. We hope that the extra two weeks being taken for all tenders, including the one in which we are participating, will help the agency to take a balanced decision.”