Spanish El-Economista has said Gas Natural was working on a bid for the Greek government's stake in DEPA, valued at close to 1 billion euros ($1.42 billion), earlier.

It did not cite its sources.

"We are not preparing any offer for DEPA.

The Greek government has begun a privatisation process, but there is nothing on the table yet," sources at Gas Natural Fenosa said.

The Greek government said in December it was exploring the sale of whole or part of its 65 percent majority stake in DEPA to private investors to help the country expand its gas grid.

Greece has tried on more than one occasion to sell its DEPA stake. But a change of government in 2004 and the company's complicated shareholder structure have proved an obstacle.

"We did participate in an initial privatisation process some years ago, but in the end that was suspended," the Gas Natural Fenosa sources said.

At 0941, Gas Natural shares were up 0.2 percent to 13.35 broadly in line with the rise on the blue chip IBEX index

DEPA's chief executive, Harry Sachinis, told Reuters in an interview in December he expected the privatisation to be concluded in the second half of 2011.