Socar Drops Turkish Gas Distributor Bid

Azeri state oil and gas company Socar has broken off talks with  EWE over the possible purchase of the German company's controlling stakes in two Turkish regional gas distributors and the company's other Turkish energy assets, officials from Socar's Turkish subsidiary confirmed to NGW January 22. Socar had confirmed in October last year that it was in talks with EWE about buying its Turkish assets.

EWE holds controlling 80% stakes in Kayserigaz and Bursagaz, which hold monopoly gas distribution rights to the Turkish cities of Kayseri and Bursa respectively, as well as gas and power trader EWE Enerji which holds a wholesale gas portfolio of around 2.5bn m3/yr and energy consultancy and solutions provider Enervis.

The remaining 20% stakes in the two distributors are split 50-50 between Turkey's Calik Enerji (10%) and the respective municipalities (10%). Turkish media reports January 21 claimed that Turkey's Palmet Enerji was in "advanced talks" with EWE over the purchase of its Turkish assets.

Palmet already holds the rights to distribute gas in the Turkish municipalities of Gebze and Erzurum and holds a power generation portfolio.

Socar officials gave no reason for declining the purchase of EWE's assets, but this is the second time that the Azeri state company has been closely linked to a Turkish retail purchase but has pulled out. In 2017 Socar, which is developing a major oil refinery in Turkey, was widely expected to buy Turkey's biggest petroleum distributor Petrol Ofisi from its then owner OMV. In the event petrol Ofisi was bought by Swiss trader Vitol.

Turkey's retail energy markets have enjoyed mixed fortunes over the past few years with Ankara frequently intervening to hold down prices ahead of elections.