Alexandros Petersen, an adviser to the European Energy Security Initiative at the Woodrow Wilson International Center for Scholars in Washington, wrote Saturday in the Athens daily I Kathimerini that, until now, Greece, though its state-owned gas company DEPA, was committed to the proposed Interconnector Greece-Italy pipeline -- one of three southern corridor pipelines on the drawing board.
But in a measure passed this month as part of the requirements of its financial bailouts from the European Union and the International Monetary Fund, Athens will seek to sell up to 55 percent of DEPA and a 31 percent share of its gas transmission subsidiary DEFSA, energy trade publication Platts reported.
The privatizations come at a time when the Greek economy is in a freefall, shrinking 9 percent in less than two years as civil unrest triggered by austerity measures continues to grip the nation.
International financial analysts have predicted unless it can raise more cash through privatizations, Greece won't be able to service its debt by the end of the year.
Under the new energy law response, Greece will also sell its remaining 35.5 percent ownership stake in Hellenic Petroleum as it seeks to raise $2.5 billion-$7.2 billion by the end of the year.
This will change the southern corridor equation for Greece, Petersen wrote. DEPA was a shareholder in IGI, which "hindered Athens's ability to play one project against the other and ultimately end up supporting (and investing in) that which will be favored by the holders of the gas."
All that could change under the new law.
That's because it also includes an "unbundling" element, in which DEPA and its pipeline operator subsidiary DESFA would be separated to comply with the directives of the European Union's Third Energy Package. Among other things, it seeks to ensure the separation of transmission and storage operations from energy supply, electricity generation, or gas production operations.
The directive requires owners and operators of transmission and distribution systems to give access to third parties using non discriminatory tariffs.
Greece is among a set of only seven EU member states expected to implement unbundling measures by the end of this year -- the others are Austria, the Czech Republic, Denmark, France, Italy and Portugal.
"The partial privatization and unbundling of DEPA and DESFA should allow for new investors to seek out new opportunities, including hedging their bets against commitment to a pipeline that may never be built," Petersen wrote.
Greece will also comply with the EU directive by giving its Regulatory Authority for Energy, or RAE, much stronger powers, the U.S. trade publication Power Engineering reported.
It said RAE will be able to approve network modifications, issue licenses and replace the current postage-stamp system of gas pipeline access with an entry-exit system, starting with establishing a virtual trading point for gas, which could be up and running by the end of the year.
"The powers of the (RAE) will also be strengthened, hopefully allowing for decisions to be based more on commercial rather than political considerations," Petersen wrote.
Under the new law, he said, Greece will be able to potentially throw in with the competitors to the IGI pipeline -- Nabucco and the Trans-Adriatic Pipeline -- thus increasing its leverage in the southern corridor wheeling and dealing.