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    Greek Depa Reshuffles Assets; Desfa Deal Signed


The state-owned importer has sold and bought stakes in local gas firms and plans to renegotiate key contracts, while gas grid Desfa is now largely foreign owned.

by: William Powell

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Greek Depa Reshuffles Assets; Desfa Deal Signed

Greek state gas supplier and importer Depa has raised its profile in the capital's gas supply, while divesting its supply business in its second city. It is also reported to be seeking renegotiation of its three key foreign gas import contracts. This comes on the day that a majority stake in the country's gas transmission system Desfa was formally divested to a western consortium.

Depa announced July 20 that it has completed the sale to Italy's Eni of a 51% stake in Thessaloniki gas supplier Zenith for €57mn ($67mn), which includes the dividend for the year 2017. Depa and Eni reached agreement on the deal May 16 and it secured Greek anti-trust approval July 12.  Thessaloniki in northern Greece is the country's second largest city and close to the country's main piped gas import routes.

That sale follows a week after Depa itself agreed to pay Shell 150mn for its 49% stakes in two of the wholly-owned subsidiaries of Athens area's Attiki Gas: the supply firm EPA Attikis (39mn) and distributor ECA Attikis ($111mn), both subject to anti-trust approval. Once approved, Depa will be the sole shareholder of both subsidiaries. It said this was part of an overhaul of Depa's position in Greece's energy retail market.  Depa's financial consultants were Rothschild and Alpha Bank; Labadarios & Associates and Koutalidis gave legal advice. Opinion on the fair and reasonable transaction was provided by Eurobank.

Depa president Velissarios Dotsis said the July 13 agreement with Shell was "an important development for both Depa and the country's energy sector."

Desfa deal signed

Meanwhile a western consortium of transmission system operators, led by Snam, signed the documents in Athens July 20 for their joint acquisition of a 66% majority stake in Greek gas grid operator Desfa

The consortium - which also includes Enagas and Fluxys, each with a 20% interest - won the tender in April with its €535mn bid for the 66% Desfa interest, which has since been approved by the European Commission and the Hellenic Court of Audit. The stake is being acquired from Greek privatisation agency HRADF (known in Greek as Taiped) and Hellenic Petroleum.

The completion of the transaction, expected by the end of the year, is subject inter alia to the finalisation of the internal reorganisation whereby HRADF and Hellenic Petroleum become direct shareholders of Desfa – currently held by Depa – and to the certification of Desfa under the ownership unbundling regime by Greek energy regulator RAE. Desfa also owns the Revithoussa LNG import terminal near Athens.

Greece is an important crossroads for the diversification of gas supplies as well as the opening of new natural gas routes in Europe and may additionally develop as a gas hub for south-eastern Europe.  The Snam-led consortium has secured a non-recourse acquisition financing for about 65% of Desfa's enterprise value; financing is subject to documentation and closing is expected to occur in the next few weeks.

Depa launches contract renegotiations

Depa CEO Dimitris Tzortzis meanwhile has started a round of renegotiation talks with Russia’s Gazprom, Algeria’s Sonatrach and Turkey’s Botas, leading Greek newspaper Ekathimerini reported July 20.

It has long-term contracts for the supply of: 3bn m3/yr from Gazprom Export at the Greek-Bulgarian border; up to 1bn m3/yr in the form of LNG from Sonatrach delivered to the Revythoussa LNG import terminal near Athens; and 0.75bn m3/yr from Turkish state gas group Botas. The Sonatrach and Botas contracts are due to expire in 2021. Citing sources, the newspaper reports that Depa will ask Botas for a termination of its contract by mutual consent. Contractually Depa is due to begin receiving 1bn m3/yr of Azeri gas  imported via Turkey and the Trans Adriatic Pipe from the BP-led Shah Deniz consortium.

Greece's ambassador to Moscow was summoned July 20, two days after Athens ordered the expulsion of two Russian diplomats for allegedly interfering in Greek relations with its northern neighbour, the former Yugoslav republic of Macedonia. The latter's agreement in June to change its name to 'North Macedonia' lifted Greece's objections to it negotiating its entry to Nato. 

Russian foreign minister Sergei Lavrov also cancelled a trip to Athens July 19. Four months ago, relations had been so cordial that Greece was one of very few Nato countries not to expel any diplomats over the poisoning in the UK of former Russian spy Sergei Skripal and his daughter Yulia in March 2018; the US, Ukraine, Nato countries and Australia together expelled more than 100.