EU Investigating Azeri Plan to Acquire Greek Gas Company

11/16/2014 10:24:36 PM

(MENAFN- Qatar News Agency) Brussels November 06 (QNA) - The European Union has launched an investigation into plans by an Azeri state company to acquire Greece's gas transmission network operator amid concerns that merger could hinder competition the bloc's executive said Wednesday.

The acquisition is connected to the planned 3500-kilometreTrans-Adriatic Pipeline (TAP) which aims to reduce European energy dependence on Russia according to the (dpa) news agency.

It would bring in gas from Azerbaijan's Shah Deniz II field to Italy passing through Turkey Greece and Albania. First deliveries to Europe are expected in 2019.

The Azeri state company SOCAR has offered 400 million euros (500 million dollars) to acquire a majority stake of up to two-thirds in Greece's natural gas transmission network operator DESFA.

But the European Commission is concerned that the merger could "reduce competition on the upstream wholesale supply market for natural gas in Greece" it said in a statement.

"DESFA owns and operates Greece's sole high-pressure gas transmission and Greece's only LNG terminal" it noted. "The merged entity may have the ability and the incentive to hinder competing upstream gas suppliers from accessing the Greek transmission system." "This could reduce the number of current and potential suppliers and the amount of natural gas in Greece and lead to higher gas prices for clients" it added.

The commission has until March 23 2015 to decide on the way forward. Companies can make concessions if the the EU's competition watchdog has concerns about the legality of a merger.

The DESFA sale is part of Greece's privatization programme much of which has been carried out under the international bailouts granted to the cash-strapped country. (QNA)

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