Socar extends deadline for DESFA deal for another month

The saga that is the privatization of gas grid operator DESFA has been lengthened another month after Azeri state company Socar agreed to renew the letter of guarantee that was due to expire on Monday until the end of November.

As the previous one-month extension agreed after Prime Minister Alexis Tsipras’s meeting with Socar CEO Rovnag Abdullayev on September 27 did not lead to a deal, efforts over the last few days were focused on getting another so that the transfer of 66 percent of DESFA to Socar can be completed. After that, a stake of between 17 and 30 percent will be transferred from Socar to Italy’s Snam, to finally bring an end to the three-and-a-half-year saga.

Socar agreed to grant another month-long extension to the letter of guarantee late on Monday, but consultations between the two sides became fraught on several occasions, as Socar officials insisted on asking for a written commitment from the sellers (state sell-off fund TAIPED and Hellenic Petroleum) that the letter of guarantee would not be canceled in case of failure to strike a deal.

That put the Greek side in a difficult position as it is desperate to keep the project alive until the completion of the second bailout review, given that the privatization of DESFA is one of the milestones. Eventually the Azeris got what they wanted.