State to start talks with sole bidder for gas company

Despite the fact that only one bid was submitted for a 35 percent stake in Greece’s state-owned natural gas company DEPA, officials at the Development Ministry were still optimistic, though not overly so, yesterday. Privatization adviser JPMorgan will submit its report to the Interministerial Privatization Committee today. The latter is expected to begin negotiations with the sole bidder, Spain’s Gas Natural. The Spanish company’s bid was not disclosed, but, according to sources, it varies between 260 and 285 million, depending on several terms. The terms have to do with the buyer’s exposure to liability for the over 100 million euros demanded by the builder’s of DEPA’s network and other infrastructure. The case has been under international arbitrage for over two years. DEPA itself is owed some 10 million euros by a fertilizer company. Whatever the outcome, Gas Natural’s offer is far below what the State expected, which was about 350 million euros. However, it seems at this moment that the government is resigned to settling for a lower amount. Accepted plan In bidding for the DEPA stake, Gas Natural accepted the company’s strategic plan, which involves bringing in natural gas from the Caspian Sea region via a pipeline from Turkey and providing Italy with part of that gas via an underwater pipeline still to be built. Gas Natural accepted this plan because one of its own strategic choices is to provide Italy, Greece and Eastern European countries with the natural gas it itself imports from Algeria. The Algerian natural gas is cheaper than the Caspian area, or Siberian gas. This is the reason Russia’s Gazprom did not bid; it disagreed with the plan to build a pipeline linking the Caspian Sea to Western Europe, because it would directly compete with its own system, which runs from Siberia to Greece via Ukraine, Romania and Bulgaria. Development Ministry officials were saying that negotiations with Gas Natural would not last long because the issues to be negotiated are few and relatively uncomplicated. Development Minister Akis Tsochadzopoulos, who visited Prime Minister Costas Simitis yesterday to inform him about talks, told him that talks will be concluded by October 15.