Greece's DEPA to go to arbitration with Gazprom over gas prices, CEO says (updated)

Metlen Energy & Metals SA

28/03/2024 14:40

(Adds quote from DEPA CEO, details on legal claims and long
term contract, context on price from paragraph 3-11)
    By America Hernandez and Angeliki Koutantou
       ATHENS/PARIS, March 28 (Reuters) - Greek gas supplier
DEPA Commercial has decided to seek arbitration over its gas
supply contract with Gazprom  GAZP.MM , DEPA CEO Constantinos
Xifaras was quoted by local Greek media as saying on Thursday.
    The Greek state-controlled company is seeking a lowering of
the price on the long-term contract signed in 2022.
    Asked about talks with Gazprom at the Power and Gas Forum in
Athens, Xifaras said: "We have been in negotiations with our
other supplier for about two years, one-and-a-half years, on
price readjustment, because this is what we've been seeking.
    "Commercial negotiations are ongoing now, they haven't
stopped, however, the company... has taken the next step which
is to go to arbitration." 
    Gazprom did not reply to a request for comment. DEPA was not
immediately available to comment on the details of the
arbitration which normally can be invoked by either party in a
private long-term gas supply contract.
In early 2022, the Greek state-controlled company signed a
contract with Gazprom for 2 billion cubic metres (bcm) of gas
per year through 2026 at a price indexed to the benchmark Dutch
TTF price by 80%, with the remaining 20% indexed to oil prices.
    European gas prices spiked following Russia's invasion of
Ukraine and a drop in overall Russian pipeline supply west, with
the TTF price hitting a record high of 306 euros per
megawatt-hour in August 2022.
    DEPA sought to revise its price downward given the new
market conditions, pursuant to its contract, but Gazprom
declined, the sources said.
    As a result, DEPA struggled to sell its gas, and eventually
was unable to accept delivery on its minimum annual amounts.
    Under take-or-pay contract terms, buyers must pay for gas
whether they can physically receive deliveries or not — any
untaken volumes are carried over to the end of the contract as a
credit.
     
     
     

 (Reporting by Angeliki Koutantou in Athens and America
Hernandez in Paris; Editing by Emelia Sithole-Matarise)
 ((mailto:angeliki.koutantou@thomsonreuters.com; +30 2102214608;
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