Azerbaijan’s SOCAR wants lower price for Greek gas grid deal

In 2013, SOCAR agreed to buy a 66 percent stake in the crisis-hit gas supply grid operator for 400 million euros ($446.3 million).

But the acquisition stalled after SOCAR was ordered to sell 17 percent of DESFA to a third party to satisfy EU competition authorities.

Complicating the sale further, Greece passed a law in July which raised DESFA’s gas tariffs from next year by a much lower amount than expected.

“The Greek side has taken some steps which violate the tender process ... That’s why DESFA’s price should be now half its initial value,” Rovnag Abdullayev told reporters.

“SOCAR does not intend to pull out of the deal,” he said, adding that SOCAR was expecting explanations from the Greek government.

Abdullayev said Italian gas grid operator Snam was still interested in buying a 17 percent stake in DESFA from SOCAR.

A senior official in the Greek Energy Ministry said SOCAR should take into consideration subdued demand for gas in Greece.

“Regulations on the tariffs...are based on [gas] consumption estimates. Obviously, the Azeris are only looking at the financial part and not at the other aspect, which is plunging [gas] consumption in the country,” the official said on condition of anonymity.

He said SOCAR did not have a say in the tariff hikes since the company would be a passive shareholder in DESFA.

DESFA’s sale is part of a privatization program required under Greece’s three international bailouts since 2010 and is expected to raise 188 million euros for state coffers this year, helping the country meet a 2.5 billion-euro target for state asset sales.