Platts

Friday, July 15, 2011

Azerbaijan's state-owned Socar is interested in buying a stake in Greece's state natural gas supplier Depa when the latter is privatized later this year, Socar President Rovnag Abdullayev said Friday, with a deal likely to have implications for one of the three proposed gas pipeline projects to bring Caspian gas to Europe.

Ties between Baku and Athens have strengthened this year after the two sides agreed that Azerbaijan would supply gas directly to Greece through Turkey's gas transportation network.

Previously, Greece bought up to 750 million cubic meters/year of Azeri gas that was re-exported to Greece by Turkey's Botas under an agreement signed in 2002.

Greece, as part of its efforts to raise funds for its struggling economy, has said it wants to sell off stakes in a number of state companies, including refiner Hellenic Petroleum and Depa.
Abdullayev met with Depa Chairman Harry Sachinis in Baku Thursday for talks.

"If it is profitable both economically and commercially, we can take part in Depa's privatization," Abdullayev was quoted as saying by Azeri news agency news.az.

"Yesterday, I met the president of Depa where he said that the Greek company is open to privatization," Abdullayev said.

Under its privatization plan, approved last month by the Greek Parliament as a condition for receiving fresh financial bailouts from the EU and IMF, Athens committed to selling a 55% stake in Depa.

It also said it would sell the remaining 35.5% stake it owns in Hellenic Petroleum and a 31% share in the Greek gas transmission company DEFSA.

Depa is a shareholder in one of the pipeline projects to bring more Azeri gas to Europe through the so-called southern corridor, so having Socar as a major shareholder could be beneficial to that project.

The Interconnector Turkey-Greece-Italy (ITGI) is a planned 11 billion cu m/year link, which its shareholders say is "the most advanced and competitive option to ensure physical transport of Azeri gas to where it is most needed in the EU, that is southern east Europe and central and northern European markets."

It is up against the 31 Bcm/year Nabucco pipeline project and the 20 Bcm/year Trans-Adriatic Pipeline, with commercial bids from the projects to transit gas from the second phase of Azerbaijan's giant Shah Deniz field due by October 1.

The southern corridor's purpose is to bring Caspian and Middle Eastern gas to Europe, thereby reducing dependence on Russian supplies.

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