Russia’s Gazprom and Sintez rush for Greek gas company

RIA Novosti / Egor Eryomov

RIA Novosti / Egor Eryomov

Greece is reportedly close to selling its state-owned natural gas group for 1.5bn euro to Russia bidders – either state-run Gazprom or privately run Sintez despite warnings from the EU and US against Russian expansion into the Greek market.

­“It begs the question — what if the Russians make us an offer we can’t refuse?” a senior Greek official told the Financial Times. “We are under pressure from the troika [the European Commission, European Central Bank and International Monetary Fund] to raise as much money as we can from privatization.”

The sale of DEPA, the gas trading company, and its subsidiary DESFA comes as part of Greece’s broad privatization plan, which includes the sale of the betting company OPAP and prime real estate projects. Through privatization the country hopes to raise up to 15bn euro by 2016 in order to reduce Greece’s debt burden by about 7%.

Among other bidders are Socar, the Azerbaijan state gas company; Greece’s M2M partnership between MotorOil, an oil refiner, and Mytilineos, an energy company; and GEK Terna, a Greek contractor and energy producer that is only interested in acquiring DESFA, the FT reported.

Italian energy companies Edison, АЕМ and ENI, Algeria’s Sonatrach, Spain’s Gaz Natural and Enagas of Israel, Japan’s Mitsui, the Dutch company Vopak, China’s ENN and Chezh CEZ were also reportedly interested in the Greek gas assets. None of them have made a final bid yet, highlighting the concerns of many international investors that Greece could leave the eurozone.

Gazprom announced its plans to bid for DEPA in Novemebr 2012. The company already supplies 90% of Greece’s natural gas demand through a pipeline from Bulgaria.

Meanwhile, the US state department warned that Greece should ensure diverse sources of natural gas supplies to ensure regular supply. The EU is also reluctant for Gazprom to expand intp Europe. In September 2012 the European Commission launched an anti-trust probe against Gazprom over alleged unfair competition and price fixing If Gazprom is found to have broken the rules it could be fined 10% its annual revenue or $1.1-1.4bn.