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Oil report

UPDATE 2-Italy's Snam eyes 17 pct stake in Greek gas network - SOCAR

(Adds Snam comment)

BAKU, Nov 10 (Reuters) - Italian gas grid operator Snam is interested in buying a 17 percent stake in Greek gas grid operator DESFA from SOCAR, the Azeri state energy firm’s president said on Tuesday, in a deal that may calm European Commission concerns.

SOCAR has been looking to buy 66 percent of DESFA for about 400 million euros ($430 million) from Greece and Hellenic Petroleum since 2013. But it has run into opposition from the European Commission.

Brussels says such a deal risks curbing competition on the upstream wholesale supply market for natural gas in Greece since it could make it harder for SOCAR’s rivals to access the Greek gas transmission network.

“Italian company Snam approached us about buying shares in DESFA,” SOCAR’s Rovnag Abdullayev told reporters. “This company is interested in buying a 17 percent stake in DESFA.”

SOCAR sees such a deal as possible by the end of the year.

A Greek privatisation official said in August that Athens was examining an option to address EU concerns by which SOCAR would buy the 66 percent stake and then flip at least 17 percent either to the Greek state or a third party.

SOCAR did not rule out such an option.

Asked about the comments from the SOCAR president, a Snam spokesman referred to the memorandum of understanding (MoU) the Italian company signed with SOCAR in September.

The MoU “focuses on the companies’ cooperation on the evaluation of initiatives for the development of the southern gas corridor as a new major route for gas flows to Europe,” the spokesman said, adding the arrangement provided the basis for further exchange of information.

State-controlled Snam, which has a strategic alliance with Belgium’s Fluxys, recently said it was interested in taking a stake in the TAP gas pipeline project.

TAP, which will link Azerbaijan’s giant Shah Deniz II gas field with Italy, is 20-percent owned by Socar.

$1 = 0.9319 euros Reporting by Nailia Bagirova; additional reporting by Stephen Jewkes in Milan; writing by Margarita Antidze; editing by David Clarke

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