September 13, 2012 / 7:51 PM / 7 years ago

Greek gas company wins contract boost before privatisation

* Natural gas firm DEPA renews contract to supply power utility PPC

* PPC sells buy option for a 30 percent stake in DEPA

* Deal clears the way for DEPA’s privatisation

ATHENS, Sept 13 (Reuters) - Greek natural gas company DEPA got a major boost ahead of its planned privatisation on Thursday, after its biggest customer agreed to renew its supply contract and settle disputes.

Greece’s biggest electricity producer PPC said in a bourse filing it will keep buying gas from DEPA until the end of 2020, procuring between 1.08 billion and 1.54 billion cubic metres per year of the commodity.

In a side deal, PPC will get from the state 32.9 million euros to waive its buy-option for a 30 percent stake in DEPA, and another 47 million to settle outstanding disputes between the two state-controlled companies.

The deal, which PPC shareholders must approve on Oct. 4, clears the way for DEPA’s sale, which Greek privatisation agency officials expect to happen in the first half of next year.

DEPA is one of the first big firms to go under the hammer under Greece’s privatisation plan, in which the debt-laden country hopes to raise 19 billion euros by the end of 2015. Fourteen potential buyers, including Russian gas giant Gazprom have expressed initial interest.

PPC, which produces 13 percent of its electricity by burning natural gas, is DEPA’s biggest client. DEPA produces none of the gas it is selling to clients but buys about 80 percent of it from Gazprom, getting it through a pipeline from Bulgaria.

Both DEPA and PPC have been hit hard by Greece’s economic depression and debt crisis, which caused a severe liquidity crunch in the country’s energy system.

DEPA sits on unpaid bills worth about 300 million euros and had to take out a bank loan this year to pay for a Gazprom delivery. PPC’s first-half profits evaporated after it hiked provisions to shield itself from customers dodging bills. (Reporting by Harry Papachristou; Editing by David Gregorio)

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