Greece’s DEPA secures 15% natural gas discount from Gazprom

Author: Ben Samuel

2014/02/26

Greek state-owned natural gas supplier DEPA has secured a 15% discount on supplies from Russia’s Gazprom, according to Greece’s Ministry of Environment, Energy and Climate Change.

The new price will be applied retroactively from 1 July 2013 and will last until 2016. DEPA will then be committed to buying from Gazprom for an additional 10-years, with two further price renegotiations possible during that time-frame

In addition, the ministry said DEPA’s take-or-pay obligation would be reduced. A source within the Greek power sector suggested this could mean a cut to 2 billion cubic metres (bcm)/year from the 2.4bcm/year it was committed to.

One independent supplier within Greece said that based on the last year’s third-quarter import price of Russian gas, DEPA’s contract would be reduced to about $397 per thousand cubic metres, equivalent to €27.416/MWh.

While welcoming any fall, he said this still keeps the price above other countries in western Europe, although it will be below neighbouring markets. In addition, he questioned why it took so long for DEPA to request the renegotiation.

“All the other European [firms] started this process in 2010, so why then did DEPA wait until June 2013 to ask for a discount? That is two lost years of paying higher prices”, the source said.

Last month, Greek energy regulator RAE revealed that the average import price in the third quarter of 2013 was €31.50/MWh ( see ESGM 27 January 2014 ). That price includes the cost of LNG deliveries into the country’s Revithoussa port and pipeline supplies from Turkey. Ben Samuel