Court battle possible for Gazprom take-or-play deal

DEPA, the Public Gas Corporation, is expecting a decision, in writing, from Gazprom within the next few days, according to sources, on the former’s request for revisions to a misjudged take-or-pay clause in its gas supply agreement with the Russian gas giant that may prompt a charge of about 100 million euros for unconsumed gas.

Although the matter has been put on hold in the lead-up to this weekend’s snap elections in Greece, independent gas-fueled electricity production plant operators are feeling jittery. Should DEPA fail to reach an agreement with Gazprom, the clause will be activated and its cost will be passed on to DEPA customers. Independent power plants would be the hardest hit as they are the country’s main gas consumers.

Independent power plant operators will be prepared to take legal action against DEPA in such an event, according to energypress sources.

Based on the exisiting take-or-pay agreement signed by Greek officials, DEPA is required to absorb an annual amount of at least two billion cubic meters of Gazprom natural gas, or, otherwise, pay a penalty if this level is not achieved.

However, demand for natural gas in Greece fell by approximately 35 percent in 2014 compared to the previous year, resulting in an absorption level that is about 300 million to 400 million cubic meters below the agreed minimum. This discrepancy could cost DEPA a penalty of about 100 milion euros.

Gazprom officials have already received a DEPA proposal that includes a wide range of revisions to the current agreement between the two sides, according to energypress sources. If implemented, it would spare DEPA of needing to pay for the gas misjudgement this year, while also offering certain long-term assurances to Gazprom.