First take-or-pay installment paid for unabsorbed Russian gas

DEPA, the Public Power Corporation, has just paid the first of two installments, worth 40 million dollars, to Gazprom following the latter’s activation of a take-or-pay clause included in its supply contract. The clause was activated as a result of unabsorbed natural gas amounts ordered by the corporation for the Greek market in 2014.

DEPA’s second installment to Gazprom is scheduled to be paid in March. The total amount to be paid by DEPA to the Russian gas company has yet to be decided as negotiations on the issue are still in progress. Initial estimates had put the figure at roughly 100 million euros.

The resulting cost of the take-or-pay clause will be rolled over onto DEPA consumer bills – electricity producers, EPA gas suppliers, and industrial enterprises – as had been agreed to in supply contracts. The issue also carries a regulatory dimension, meaning coordination with RAE, the Regulatory Authority for Energy, will be needed.

A negligible amount to be paid by DEPA to Gazprom is expected for 2015 as a result of increased gas consumption in Greece compared to 2014. The gas amount ordered by DEPA for 2016 is likely to be more than covered, which would result in no take-or-pay clause payment.