In mid-2013, Azerbaijan's SOCAR landed a deal with the Greek government under which it would assume control of its gas transmission company, DESFA, by acquiring 66% of the shares. Since then the agreement has been essentially frozen due to the EU Commission's objections, despite continuous lobbying from both Athens and Baku.
Brussels seems adamant in its request that SOCAR adheres fully to the Third Energy Packageby which a state producer and trading company cannot manage a transmission system, such as DESFA for the Greek market. As such, the DG Energy requested that SOCAR divest its stake in the Greek company from 66% to 49% thereby losing full control. Ultimately, this changed the long-term plans of the Azeris to assume a foothold in the Greek market as a spring board for their expansion further into Southeast Europe. Moreover, the Greek state is facing difficulties and has for almost a year calculated the proceedings of this privatization as an addition to its budget, currently facing a shortfall of more than €400 million.
It should be noted that in SOCAR's case, it would be the first time that a non-EU company would buy an EU gas transmission entity, and in effect, activate the clauses of the energy package for the first time. In this regard, Eurocrats seem to be eager to fully implement both the spirit and the letter of the Law, bearing in mind their opposition with Russia's Gazprom, which is also battling the EU on a number of fronts, most important of which is the South Stream pipeline project.
Further, the appointment of the new Commissioners, due to be completed in the coming months, has in effect paralyzed the decision making process in Brussels, further derailing the privatization, whilst all information points out that the Azeris would not accept relinquishing control of DESFA by decreasing their percentage. It should be noted that Gazprom mentioned previously, would surely react in a legal manner in case a "double standard" policy was enacted in the case of the Greek gas company, a culmination that would ultimately lead into a wide range of disagreements between EU member states that are already in opposition with Brussels on the South Stream project, such as Bulgaria and Hungary.
The situation is made further complex by the Trans-Adriatic Pipeline (TAP) and Trans-Anatolian(TANAP), the two basic axes of the Southern Corridor project to carry Azeri natural gas into the EU via Turkey and Greece. SOCAR's main interest in DESFA was the use of its assets as a conduit for gas transfer and trade in the regional market bearing in mind that the Ionian-Adriatic Pipeline (IAP) is also scheduled. Any delay in the plans of the Corporation from Baku, has its own effects in the grand design of the Southern Corridor and it is not improbable to assume that other entities are eying SOCAR's presence in the local market. A joint venture between SOCAR and a third player concerning DESFA is a possible outcome.
Link to source: http://www.naturalgaseurope.com/socar-struggles-to-get-into-the-greek-gas-market
