DEPA, the public gas corporation, is making an effort to renegotiate contracts with its two main suppliers, Russia’s Gazprom and Algeria’s Sonatrach, for improved terms, energypress sources have informed, as a result of market condition changes.
Besides supplying DEPA, Gazprom now also sells directly to other major customers in Greece, such as the Mytilineos group, a development reshaping the country’s natural gas market.
DEPA’s chief executive Dimitris Tzortzis and Gazprom Export deputy director Elena Burmistrova are believed to have discussed the subject at a meeting in St Petersburg last month. Officials of the two gas companies are expected to stage a new meeting in St Petersburg this week, sources informed.
DEPA officials will seek to improve the terms of the Greek gas utility’s existing Gazprom gas supply deal to help offset the Russian firm’s new dealings with other customers in Greece.
DEPA already appears to have ensured an exemption from a take-or-pay clause requiring payments for unconsumed amounts specified in supply contracts. DEPA is also pushing for a lower price but Gazprom officials do not appear willing to discuss such a prospect.
However, DEPA does appear to stand a chance of being granted a right to resell a proportion of gas amounts purchased from Gazprom in Balkan markets.
DEPA is also seeking to improve the terms of its supply deal with Algeria’s Sonatrach, the Greek gas utility’s second biggest source, supplying LNG.
Tzortzis, the DEPA boss, was in Algeria earlier this month for talks with Sonatrach officials on supply security concerning the Greek market in 2019, as well as supply price and pricing formula issues.
At these talks, Sonatrach officials pressured for price hikes as a result of higher international gas prices, but the DEPA boss insisted Algerian LNG needs to remain competitively priced as TAP-pipeline natural gas stemming from the Azerbaijani section of the Caspian Sea will begin entering the Greek market in 2020. A contract ensuring one billion cubic meters per year of Azerbaijani natural gas supply to the Greek market has already been signed.
As is the case with Gazprom, DEPA is also pursuing the right to resell a portion of its Sonatrach gas purchases to foreign markets.
DEPA intends to terminate a third gas supply contract held with Turkey’s Botas in 2020, a year ahead of its expiry date, as the terms of this agreement are regarded as being unfavorable in view of the imminent supply of Azerbaijani gas to Greece via the TAP pipeline. Though talks between DEPA and Botas have not been held, an extension of their contract has already been ruled out.
Gazprom and DEPA currently hold a supply agreement for 2.6 billion cubic meters per year, until 2026. Sonatrach supplies the Greek gas utility between 0.55 and one billion cubic meters per year based on a contract expiring next year, when DEPA’s deal with Turkey’s Botas, supplying 0.75 billion cubic meters per year, also expires.