Brussels red tape holds up gas operator deal

 EC reluctant to recognize Socar as DESFA’s owner; Athens tries to force issue

The deal for Azeri natural gas company Socar to buy a controlling stake in Greece’s Natural Gas Transmission Network Operator (DESFA), which was agreed last year, is not near completion yet because of the European Commission’s reservations, diplomatic sources have told Kathimerini.

Greece’s privatization fund, TAIPED, accepted a 400-million-euro offer from Socar last summer for 66 percent of DESFA but since then the agreement has been caught up in Brussels red tape. The European Commission asked Socar to sign individual agreements with each European Union member state, declaring that it accepted the EU’s legal and regulatory framework on natural gas. As this would have been a tremendously lengthy process, requiring the approval of each national parliament, Brussels proposed the signing of an agreement between the EU and Azerbaijan. But this idea was also ditched.

Then the Commission asked Socar to reduce its holding in DESFA to below 50 percent by selling 17 percent of the company to a third party. The Azeris refused to do this. Brussels insists this is the only way that the deal can comply with the EU regulation on the security of gas supply.

Greece has decided to try to force the Commission’s hand by having the Regulatory Authority for Energy (RAE) approve DESFA as an independent energy operator while recognizing Socar as the majority shareholder. This certificate has been sent to the Commission for its approval. EU regulations demand that Brussels respond within two months. If it does not reply, it is deemed to have accepted this development.