Greek gas utility DEPA, headed for privatization, has negotiated a vastly improved gas supply deal with Russia’s Gazprom whose terms also factor in price levels at the Dutch gas trading platform TTF, one of Europe’s biggest hubs.

The new arrangement, virtually finalized but with mere formalities pending, drastically reduces the supply cost for DEPA. Until now, the Greek gas utility’s supply price has been oil indexed.

Under the new agreement, TTF price levels will play a key role. The TTF will count for 40 percent of DEPA’s supply price while 60 percent will be oil indexed.

Just days ago, price levels at the Dutch hub were approximately 14 euros per MW/h compared to over 20.5 euros per MW/h for pipeline gas, a 46 percent difference.

DEPA has also achieved an improved take-or-pay clause in its agreement with Gazprom, offering greater flexibility to the Greek utility.

Under the previous terms of the take-or-pay clause, DEPA needed to absorb at least 80 percent of its annual contracted amount of 2 billion cubic meters, or 1.6 bcm.