Greek sell-off hopes hit as Gazprom fails to bid for gas supplier Greece's privatisation programme suffered a severe setback when Gazprom failed to bid for Depa, the state-controlled natural gas supplier, as a deadline for binding offers expired on Monday, while only one offer was received for Desfa, which operates the country's gas distribution network. Gazprom, the only bidder, had been expected to offer about €800m for a controlling stake in Depa following months of negotiations with the Greek government on the terms of sale, said a person with knowledge of the process. "We have carefully weighed the benefits and risks of Gazprom's participation in the tender and decided not to submit a binding offer," said Alexander Medvedev, Gazprom's deputy chairman. Gazprom said it had not received "sufficient guarantees that the financial state of Depa would not deteriorate by the time the deal is completed," noting that it could take a year to complete the disposal. Depa is burdened with more than €500m of outstanding debt owed by Greek customers, while procedures to unbundle Desfa, a wholly owned subsidiary of Depa, have not been completed. Makis Papageorgiou, Greek energy minister, said fresh bids for Depa would be invited later this year. The Russian pullout came after the EU last week reiterated that it would block a sale to Gazprom on grounds of conflict of interest, the same person said, adding: "The EU's energy and competition directorates had both made clear they were both opposed to the deal." A transaction of this kind would need to be cleared by Brussels under EU rules. Gazprom is already Greece's main supplier of natural gas delivered through a pipeline from Bulgaria under a renewable bilateral agreement running through 2016. Officials at Taiped, the Greek privatisation agency, had hoped a successful sale of the gas companies would kindle foreign investors" appetite for other state-owned corporations due for sale later this year and enable Athens to achieve the target of €2.6bn in privatisation revenues in 2013 agreed with the EU and International Monetary Fund. The collapse of the Depa deal comes hard on the heels of a public disagreement between the EU and IMF over the failure of Greece's first €110bn bailout programme. The bailout included a €50bn privatisation programme imposed as Athens fell behind with fiscal and structural reforms. Greece has raised less than €3bn in the past three years from privatisation sales. However, Athens officials on Monday sounded hopeful of completing a deal with Socar, the Azerbaijan state gas supplier, which made the only binding offer for Desfa after Sintez, a private Russian gas company that had also been shortlisted, failed to come up with a binding offer. Socar sells small amounts of gas to Greece through a cross-border pipeline with Turkey. A senior government official said the sale of Desfa to Socar would boost Greece's chances of participating in the Trans-Adriatic Pipeline project to carry Caspian gas to the EU through Turkey, Greece and the western Balkans. Additional reporting by Guy Chazan in London