DEPA in gas supplier talks for ’22 prices, Gazprom deal crucial

Gas company DEPA is currently engaged in negotiations with its suppliers for agreements  covering 2022, its talks with main supplier Gazprom being the most crucial. The pricing formula to be agreed on by DEPA with Gazprom will greatly shape the prices to be offered by the Greek company to its customers – electricity producers, industrial producers and retail energy suppliers.

Though there are signs of a possible price de-escalation, gas prices remain elevated. The percentage of Gazprom supply to be oil-indexed will be a pivotal factor in price levels offered by DEPA to customers.

DEPA has already reached an agreement with Algeria’s Sonetrach for a one-year extension to a deal expiring at the end of 2021, energypress sources have informed. A hybrid pricing formula primarily based on the Dutch TTF index has been agreed to, the sourced added.

Greece’s agreement with Turkey’s BOTAS, for natural gas originating from Azerbaijan, is set to expire at the end of this year, but no moves have been made for a renewal as Azeri gas has been supplied by Azerbaijan Gas Supply to the Greek market since the end of 2020 through the new TAP route. This supply contract, fixed and not subject to negotiation, is valid until 2044.

DEPA’s pending agreement with Russia’s Gazprom Export, its main supplier, is the most crucial. It expires in 2026 but is subject to annual talks concerning pricing formula and take-or-play clause revisions.

DEPA’s agreement with Gazprom is currently entirely oil-indexed. The the two sides had agreed to an extraordinary revision for 2020 and 2021 indexing prices with the TTF gas index as oil prices were considerably higher. The opposite is now the case, with LNG prices well above oil prices. Gazprom officials now prefer prices to not be fully indexed to oil.


Solid trader interest for LNG terminal slots despite crisis-related concerns

Demand is high for LNG slots at the Revythoussa terminal in 2022, made available through ongoing gas grid operator DESFA auctions, attracting strong interest from importers, despite concerns that the current energy crisis and difficulty to make price projections could dampen interest at these sessions, ending November 2 with a third and final auction.

The level of interest for LNG slots at DESFA’s Revythoussa terminal, on the islet just off Athens, is significant for the gas grid operator as well as power grid operator IPTO, as it helps shape the country’s energy security picture, especially for the challenging colder months, right up until the end of April in 2022.

A total of 2.5 billion cubic meters of LNG is expected to be needed in 2022 to satisfy the Greek market’s needs, according to sources.

Besides LNG, overall natural gas consumption in the Greek market next year is expected to reach 7.5 billion cubic meters.

Of this total, 5 billion cubic meters is expected to be supplied through pipeline gas imports, 3.5 million cubic meters coming from Russia, one billion cubic meters from Azerbaijan, through the TAP route, and 0.5 billion cubic meters from Turkey’s Botas.




Six Greek heavyweights among DEPA Commercial contenders

Six major Greek energy market players are among the contenders through to the second round of the DEPA Commercial sale, the biggest domestic turnout for an energy-sector tender in recent years, highlighting the gas market’s significance and prospects over the next decade.

The country’s energy transition plan is aiming for zero emissions by 2030.

Hellenic Petroleum (ELPE), joined by Italian partner Edison, a Motor Oil and power utility PPC partnership, Mytilineos, Gek-Terna and the Copelouzos group are the six Greek contenders, among a list of seven bidding teams shortlisted for the DEPA Commercial sale’s final round, entailing binding bids.

Gas utility DEPA, from which DEPA Commercial has been established for the utility’s privatization, may have lost its monopoly in the natural gas market, but its assets and market share promise the new owner a leading position during Greece’s decade of decarbonization, electric vehicle market growth and drastic reduction in fuel consumption.

As a result, fierce bidding for DEPA Commercial is expected.

The company’s acquisition will provide the new owner with a portfolio of 350,000 customers plus DEPA Commercial’s international supply contracts with Russia’s Gazprom, supplying pipeline gas to the Greek company for years; Algeria’s Sonatrach, supplying LNG; and Turkey’s Botas.

Gas quantities from Azerbaijan have also been reserved by DEPA Commercial via the imminent TAP route.




DEPA set to rebate customers for Botas legal battle cost

Gas utility DEPA is preparing to rebate customers who had been burdened with costs linked to an older international court verdict against the utility in a now-resolved case with Botas, Turkey’s state-run crude oil and gas company.

The utility’s gas-supplier customers need support as they do battle amid toughened market conditions resulting from the coronavirus pandemic’s lockdown.

Earlier this month, on March 5, DEPA received a 230 million-euro retroactive sum from Botas after Stockholm’s ICC (International Court of Arbitration) vindicated the Greek utility in its overcharging case against the Turkish energy company.

The dispute began when DEPA claimed the Turkish company was overcharging the Greek utility for its purchases of Azerbaijani natural gas delivered through Turkish pipelines since 2011.

DEPA will draw from this 230 million-euro sum to rebate its customers. The utility has completed the initiative’s preparations and will start delivering payments next week, sources informed.

The biggest amount will go to customers who have supply contracts with DEPA, as they effectively took on the cost of a 180 million-euro amount paid by the utility to Botas as a result of an older unfavorable court decision against the Greek utility.

Some of DEPA’s customers had challenged this demand and avoided making payments. As a result, DEPA will be left with a considerable sum once all rebates have been made.

Thes leftover amount will prove useful as DEPA has take-or-pay clause payments to make to Botas and Gazprom for 2019.

Turkey’s Botas delivers ICC retroactive €200m sum to DEPA

Turkey’s state-run crude oil and gas company Botas yesterday paid in full a retroactive sum to Greek gas utility DEPA following its recent legal victory at Stockholm’s ICC (International Court of Arbitration) in an overcharging case against the Turkish company, the Greek utility has announced.

The sum paid by Botas to DEPA, believed to exceed 200 million euros, settles a nine-year dispute.

The ICC verdict was delivered on January 10. Botas has since begun transmitting natural gas to DEPA at a lower price level, making the utility far more competitive. Its existing gas transmission contract with Botas expires in 2023.

The dispute began when DEPA claimed the Turkish company was overcharging the Greek utility for its purchases of Azerbaijani natural gas delivered through Turkish pipelines since 2011.

A considerable percentage of the amount paid by Botas to DEPA will be returned to the gas utility’s customers who, by extension, had been overcharged as a result of Botas’ inflated pricing policy. DEPA is expected to be left with a considerable amount, still undetermined.

The development comes as a boost for DEPA, whose privatization procedure has been launched.

“This is very good news coming at the most appropriate time now that the company’s privatization procedure is in progress,” noted deputy energy minister Gerassimos Thomas.


DEPA, rebounding in wholesale market, looks to capture 40%

Gas utility DEPA appears set to regain lost ground in the wholesale market as a result of reduced gas prices negotiated over the past few months with international suppliers.

Talks for new deals between the company’s administration and customers, primarily electricity producers and retail gas firms, have indicated DEPA’s market share will increase this year.

DEPA expects a market share rise to a level of approximately 40 percent, up from 33 percent at the end of 2019.

The Greek gas utility recently renegotiated improved supply deals with Russia’s Gazprom and Algeria’s Sonatrach, while a favorable verdict by the ICC (International Court of Arbitration) in an overcharging case against Botas, Turkey’s state-run crude oil and gas company, came as an added boost. DEPA should receive a retroactive amount of around 200 million euros, according to an initial estimate.

DEPA’s revised Gazprom supply deal limits oil-indexed gas pricing to 60 percent of the total order. The other 40 percent will be priced in accordance with the Dutch gas trading platform TTF, one of Europe’s biggest hubs, where prices are significantly lower.

In mid-January, TTF price levels for LNG shipments in February were 14 euros per MW/h, including Greek gas grid entry costs, compared to over 20.5 euros per MW/h for pipeline gas, a 45 percent difference.

DEPA is currently also renegotiating the terms of its take-or-pay clause with Gazprom, requiring the Greek utility to absorb at least 80 percent of its annual contracted amount of 2 billion cubic meters, or 1.6 bcm.

As for Sonatrach, supplying LNG to DEPA, the Greek utility is believed to have reduced amounts and also achieved a discount.

DEPA’s contract with Gazprom, the utility’s biggest in terms of volume, runs until the end of 2026 with an option for a 10-year extension. ICC

The Greek gas utility’s second-biggest contract is with Azerbaijan’s Socar, running until 2040 for one bcm per year and a minimum level of 0.9 bcm. The Turkish Botas contact is DEPA’s third biggest, securing 0.75 bcm, annually, until 2021.

DEPA’s ICC victory over Botas promises wider boost for gas utility

Considerable time will be needed before a precise retroactive payment amount can be determined for gas utility DEPA following a favorable verdict by the ICC (International Court of Arbitration) in an overcharging case against Botas, Turkey’s state-run crude oil and gas company.

An initial estimate has put the retroactive amount to be received by DEPA at around 200 million euros.

DEPA claimed the Turkish company has overcharged for purchases – by the Greek utility – of Azerbaijani natural gas delivered through Turkish pipelines since 2011.

Importantly, DEPA stands to secure more competitive purchase prices for Azerbaijani gas until 2023, when the Greek utility’s transmission contract with Botas is due to expire.

DEPA covers approximately 40 percent of the total amount of natural gas it trades through this supply source, meaning the ruling’s favorable impact will be significant.

Meanwhile, DEPA is currently seeking more favorable terms from its two other suppliers, Russia’s Gazprom and Algeria’s Sonatrach.

Improved terms and supply prices promise to help DEPA rebound from consistently contracting market shares as a result of tougher competition over the past two to three years. Better conditions also promise a market boost for the Greek gas utility ahead of its upcoming privatization.


DEPA wins Botas case at ICC, retroactive cash boost expected

The ICC (International Court of Arbitration) has issued a favorable verdict for gas utility DEPA in a case against Botas, Turkey’s state-run crude oil and gas company, challenging price increases of Azerbaijan natural gas supplied to Greece by the Turkish firm since 2011, the Greek gas utility has announced.

DEPA took its case to the ICC seeking to have a previous ruling overturned. The resulting retroactive cash inflow for the Greek gas utility could be close to 200 million euros. Also, the ICC decision will secure DEPA a lower supply price from now on, enabling a favorable revision of the gas utility’s prices offered to customers.

The legal dispute between DEPA and Botas stretches back to 2008 and has produced a variety of intermediate situations and verdicts.

The latest round was initiated in August, 2016 when DEPA submitted a price-revision request to Botas for a lower gas supply price.

DEPA, pivotal for Greek energy plan, pushing ahead internationally

Through its strategic involvement in an array of pipeline and infrastructure projects, Greek gas utility DEPA is becoming a key driver of Greece’s geopolitical upgrade and the diversification of supply sources for the wider region of South-East Europe.

DEPA is establishing its position in the region through a series of significant international projects such as the acceleration of IGB pipeline construction, participation in the IGI Poseidon pipeline  interconnecting Greece and Italy, and, surely, booking capacity in TAP which, from 2020 onwards, will transport Caspian gas to Europe.

Developments around East Med Pipeline are also rapid, with the most recent being IGI Poseidon’s (the 50% – 50% JV between DEPA S.A. and Edison S.p.A ) BoD decision to fast-track the completion of all pending stages that will bring the project to maturity.  The €70 million Feasibility Study is being accelerated, along with every other stage, to complete the East Med pipeline’s design, which will also pave the way for the final investment decision.

All the above are just one part of DEPA’s multifaceted international activity. Prior to that, in October, a bilateral agreement was signed in Sofia for the start of IGB pipeline construction, a project overseen by ICGB AD, in which DEPA has a 25% stake.

The project is expected to go into operation in July 2021, with an initial capacity of 3 billion cubic meters. At first, the entire load of gas will come from TAP that will go into operation within 2020, delivering Azeri gas to European markets, in which DEPA has booked capacity of 1 billion cubic meters. Thus, through IGB, the company will supply the Bulgarian market with Caspian gas, “breaking” for the first time the existing Russian monopoly.

Another major development took place just yesterday, when the company’s Board of Directors approved the participation of DEPA, with a 20% stake, to the equity of GASTRADE, the company developing the FSRU project in Alexandroupolis.

The Terminal is complementary to the IGB pipeline and consists of an FSRU (Floating Storage Regasification Unit), anchored 10 km off the coastal area of ​​Alexandroupolis, with storage capacity up to 170,000 cubic meters of LNG and 22.7 million cubic meters daily regasification capacity, per day (8.3 billion m3 / year), as well as a 28 km long onshore and subsea pipeline system.

The international presence of the company is also enhanced by the Greek-Italian energy interconnection through the IGI Poseidon pipeline, as well as the CYNERGY program that “breaks” Cyprus energy isolation by establishing a natural gas supply chain in the country.

Apart from its participation in international projects, equally important are the company’s long-term supply contracts with Russian Gazprom, Turkish BOTAS, Algerian Sonatrach, IGSC (Azerbaijan) through the TAP pipeline, as well as the procurement of significant quantities of LNG through the global SPOT market, at competitive prices.

DEPA’s CEO, Konstantinos Xifaras, summed up the company’s international role:

“For thirty years, DEPA has been a leading player in the Balkan energy sector, as well as an integral part of the European strategy for energy diversification and security of supply both of Greece and Europe.

At the same time, by deploying multilayered energy diplomacy and participating in major international projects, DEPA establishes Greece as a regional energy hub and upgrades its economic and geo-strategic importance.”

DEPA’s footprint is solid in the domestic energy market as well, where it recently prevailed in a tender process for natural gas supply to PPC in 2020. The company acknowledged as one of the two bidders, with the ability to supply PPC with 2 million MWh.

State veto rights for DEPA Trade despite minority stake

Investors preparing for gas utility DEPA’s upcoming privatization will face ambiguous operating conditions as the Greek State, to begin by offering a majority 50.1 percent stake in DEPA Trade following an imminent company split ahead of the sale, is expected to maintain veto rights on a number of strategic matters despite its minority status in this trade venture.

Key issues to concern DEPA Trade will include the gas utility’s long-term agreements with major suppliers such as Russia’s Gazprom, Algeria’s Sonatrach and Turkey’s Botas.

DEPA’s contract with Gazprom, which runs until 2026 and is the biggest of all three, features a take-or-pay clause requiring the Greek gas utility to order no less than 1.5 billion cubic meters of natural gas per year or face fines.

DEPA’s supply agreements with Sonatrach and Botas both expire in 2021. The Botas agreement will not be extended as the soon-to-be-launched TAP project will provide direct supply to Greece from Azerbaijan. DEPA has already signed an agreement for one billion cubic meters of TAP-related natural gas per year.

Subsequently, the Greek State will maintain its influence over DEPA’s supply contracts with Sonatrach and Gazprom.

Investors considering the majority stake to be offered in DEPA Trade will not be entirely free.

A draft bill for DEPA’s split into DEPA Trade and DEPA Infrastructure ahead of the privatization is scheduled to be submitted to parliament tomorrow.

A minority stake of DEPA infrastructure will be offered to investors at a latter date. The Greek State will maintain no less than 51 percent of this corporate entity.

DESFA, Botas working on deal to liberalize Greek entry point

Greek gas grid operator DESFA and Turkish state-run crude oil and gas company Botas are working on an agreement concerning the Kipous grid interconnection in Evros, at Greece’s northeastern tip, which would enable third parties, in addition to Greek gas utility DEPA, to use the link as an entry point for natural gas imports.

DESFA has already reached an equivalent agreement with Bulgarian operator Bulgartransgaz for the gas grid interconnection at Sidirokastro, by the Greek-Bulgarian border. Subsequently, since 2017, five new firms besides DEPA, until then Greece’s only natural gas importer from this entry point, have brought gas quantities into the local market via the Sidirokastro link.

DEFSA and Botas have now been engaged in talks over the matter for several months. It is unclear how much more time will be needed for an agreement.

Their negotiations are focused on technical measure-related issues and a reverse-flow agreement that would also enable gas outflow from Greece to Turkey.

DEPA, Sonatrach close to 2019 LNG deal for price, quantity

LNG price, pricing formula and order quantity negotiations between Greek gas grid operator DEPA and Algeria’s Sonatrach, initiated last July by the Greek utility’s push for improved supply terms in 2019, are believed to be approaching finalization and could be completed within the next ten days.

On a visit to Algeria in the summer, DEPA chief executive Dimitris Tzortzis and his team countered Sonatrach pressure for higher prices by noting that Algerian LNG needs to remain competitively priced as international gas market conditions are changing. The DEPA team reminded of the planned 2020 launch of the TAP project as a new pipeline route to bring Azerbaijani gas into the Greek market.

Sonatrach currently supplies DEPA between 0.55 and one billion cubic meters of gas, annually, based on a contract that expires in 2021. Russia’s Gazprom supplies DEPA 2.2 billion cubic meters annually based on a contract expiring in 2026. A DEPA agreement with Turkey’s Botas for an annual gas amount of 0.75 billion cubic meters expires in 2021.

Greece’s energy sufficiency this coming winter will be ensured by an additional third tank at gas grid operator DESFA’s LNG terminal at Revythoussa, an islet just off Athens, DEPA officials have informed. The third tank, a 98 million-euro investment offering a 95,000 cubic meter capacity, has boosted the facility’s overall capacity to 225,000 cubic meters and also created new gas export potential into Balkan markets. Until now, Russia has fully covered the Balkan gas market.



DEPA infrastructure split likeliest development at utility ahead of sale

A full or partial separation of gas utility DEPA’s infrastructure from the parent company appears to be the likeliest development in the corporation’s much-discussed split as part of its privatization plan.

The corporation’s resulting corporate stature would remain unchanged if a full or partial split of its infrastructure division is pursued. This would not be so if the trade division were split as a new tax file number and new company would need to be established.

In the latter case, DEPA’s suppliers – Gazprom, Sonatrach and Botas – would need to offer their consent as their existing supply contracts with the gas Greek utlity would need to be transferred to a new company. Their consent cannot be taken for granted. Even if the trio were to agree, privatization-related time, which is running out, could be needed to overcome various objections.

DEPA’s local takeover agreement with Shell still needs to be endorsed by a local Competition Committee. DEPA has agreed to acquire Shell’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution ventures covering the wider Athens area. DEPA already holds the majority 51 percent in these ventures.

The announcement of a tender concerning the privatization of DEPA Trade, originally intended for November, now appears set for a delay and will most likely be rescheduled for within 2019, a tricky period, as next year will be an election year.

DEPA seeking long-term supply agreement with US firm Cheniere

A long-term LNG supply agreement of between 15 and 20 years has been the main focus of negotiations over the past few months between Greek gas utility DEPA and US energy company Cheniere, primarily active in LNG-related businesses.

DEPA’s recently appointed chief executive Dimitris Tzortzis is seeking a delivery arrangement that would enable the gas utility to not only import gas into Greece but also trade LNG in international markets, to the extent permitted by global market conditions.

Tzortzis mentioned DEPA’s ongoing talks with Cheniere at the Southeast Energy Forum in Thessaloniki last Friday without elaborating further.

The DEPA boss told the event that the two sides have already established a spot cargo LNG agreement for 2018.

DEPA intends to renegotiate existing agreements with gas suppliers Sonatrach, Botas and Gazprom and also assume a trading role in the natural gas market, DEPA officials have commented when asked if the Greek market has capacity for further gas amounts.

At present, DEPA is supplied an annual natural gas amount of 2.2 billion cubic meters by Gazprom. This deal expires in 2026. Sonatrach supplies between 0.55 and one billion cubic meters in a deal ending 2021, when an arrangement with Turkey’s Botas for 0.75 billion cubic meters, annually, also expires.

In 2020, the Trans Adriatic Pipeline (TAP) is expected to bring a further one billion cubic meters of Azeri natural gas into the Greek market.

DEPA planning pricing changes, new formula for all consumers

DEPA, the public gas corporation, is preparing to revise tariff formulas applied by the company to determine purchase prices offered to all consumer categories, including large-scale consumers, energypress sources have informed.

Until now, electricity producers have been offered special natural gas supply terms compared to household consumption, especially for heating purposes.

The gas company is believed to have completed studies that have produced results indicating leeway exists for adjustments concerning flexibility and supply security offered to customers.

It has become clear at DEPA that tariffs need to be adjusted to the energy sector’s new, liberalized and competitive environment, as shaped by institutional and regulatory changes adopted.

DEPA will seek to adopt fairer pricing formulas for all consumers, regardless of category.

The gas company has already begun negotiations with all its suppliers and is aiming to make changes over two stages. The first stage concerns the period up to 2020 or 2021 when contracts entailing gas supply by Turkey’s Botas and Algeria’s Sonatrach expire. The second stage will factor in the activation of a supply agreement for Azerbaijani natural gas via the TAP gas pipeline and Greece’s geopolitical emergence as an energy hub and role of the country’s energy exchange.

Of course, DEPA’s negotiations will also include Russian giant Gazprom, whose current supply contract for the Greek gas utility ends in 2026, and, possibly, a diversification effort by DEPA that could incorporate American LNG and spot market deals into its portfolio.

Overall, these developments changes could require DEPA to alter its gas prices offered to electricity producers, which could spark reactions from the main power utility PPC as well as independent electricity producers.

If DEPA manages to offer fair and competitive natural gas packages, then it could lay the groundwork for a leading role amid the new liberalized market.

Competition in the wholesale natural gas market is intensifying. Besides DEPA, other importers are also supplying gas to the Greek market, the main players being the Copelouzos group and the Mytilineos group.






DEPA seeking improved terms for Gazprom, Sonatrach supply

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.



DEPA appeal against Botas for retroactive hike starts today

An ongoing gas price dispute between DEPA, the Public Gas Corporation, and Botas, Turkey’s state-run crude oil and gas company, will continue at a Stockhom court, where the case was transferred today.

DEPA filed this case against Botas in an attempt to have a previous ruling favoring the Turkish energy company lifted. The verdict, which vindicated a retroactive gas price increase by Botas for its Azerbaijani gas supply, called for a 180 million-euro payment by DEPA to Botas.

The case goes back approximately ten years when Botas had demanded a retroactive payment – from 2008 onwards – of 300 million euros for various natural gas pricing discrepancies. DEPA refused to pay this sum. Ensuing negotiations failed to deliver results and Botas took legal action in 2011.

Though the Turkish company’s demand for a 300 million-euro payment was reduced to 180 million euros by this court decision, DEPA still considered the sum to be excessive. Even so, the payment was completed in September, 2016 but DEPA followed up with an appeal at the Swedish court. This appeal case begins today.

It is not the only pending legal case submitted by DEPA against Botas. Last July, the Greek gas utility took legal action against Botas seeking a retroactive price revision to a contract signed by the two sides for Azerbaijani gas supplied to DEPA.

This case, submitted to the ICC in Paris, is based on two requests made by DEPA to Botas for price revisions, the first in 2011 and the second in 2016.



DEPA payment case against Botas to be heard this month

A legal case filed by DEPA, the Public Gas Corporation, against Botas, Turkey’s state-run crude oil and gas company, in an attempt to lift a previous ruling in favor of Botas, which had called for an 180 million-euro payment to the Turkish enterprise for various natural gas pricing discrepancies between the two sides, is expected to be heard before a Swedish court in two to three weeks.

Botas had demanded a sum of around 300 million euros in retroactive payments for outstanding amounts resulting from various natural gas price revisions as far back as 2008. DEPA rejected the claim, prompting Botas to take legal action in 2011.

The Turkish company was partially vindicated by the court decision, which issued an order for DEPA to pay 180 million euros. However, the court excluded the year 2008 from its calculations of the sum to be paid.

The Greek gas company completed this payment in September, 2016, but then opted to file a case against Botas last year in an attempt to have the payment ruling cancelled. If DEPA wins this case, then Botas would need to return part of the 180 million euros it has received from DEPA.

It is not the only pending legal case submitted by DEPA against Botas. Last July, the Greek gas utility took legal action against Botas seeking a retroactive price revision to a contract signed by the two sides for Azerbaijani gas supplied to DEPA.

This case, submitted to the ICC, is based on two requests made by DEPA to Botas for price revisions, the first in 2011 and the second in 2016.

DEPA, which has sought a price reduction since 2003 for Azerbaijani natural gas supplied by Botas, decided it had no other choice but to take legal action. A hearing for this case is still a long way off.

Additional court dispute between DEPA, Botas now awaiting verdict

DEPA, the Public Gas Corporation, is awaiting an ICC (International Court of Arbitration) ruling on a case filed last month against Botas, Turkey’s state-run crude oil and gas company, challenging price increases of Azerbaijain natural gas supplied to Greece by the Turkish firm. Two legal disputes between the firms are now pending.

DEPA’s new legal case has requested an examination of natural gas price increases made by Botas in 2011 and 2016, following its alleged disregard of international market condition changes as of 2009.

DEPA is hoping for a reduction in the price of Azerbaijani natural gas supplied by Botas, which has delivered gas to the Greek market since 2003. The Greek gas company’s decision to take its case to the ICC was seen as the only remaining option following previous efforts to resolve the pricing dispute.

A court decision concerning an older dispute between the two sides is also pending.

The latest dispute is rooted in a Botas demand imposed on DEPA for a return of a 300 million-euro sum concerning price revision differences from as far back as 2008. DEPA  refused to pay this amount, prompting Botas to take legal action in 2011.

The Turkish firm was partially vindicated as the court set the amount to be returned by DEPA at just under 200 million euros. DEPA appealed this decision in 2016.





Addition of Turkey’s Botas to Southern Corridor plan implied

Though not specifically named during yesterday’s Greek-Russian energy conference in Athens, Botas, Turkey’s state-run crude oil and gas company, may join Russia’s Gazprom, DEPA, the Greek Public Gas Corporation, and Italian energy firm Edison as a fourth partner in the Southern Corridor project, an extension of the Turkish Steam plan, to supply Russian natural gas to the wider region.

Other European countries are likely to also express an interest in the project, which would increase the chances of Brussels approving the plan.

DEPA chief executive Theodoros Kitsakos reminded conference participants that a three-party memorandum of understanding (MoU), involving Gazprom, DEPA and Edison, was signed last February. He noted that all studies, including cost studies, have been carried out, while also adding that a “fourth partner is likely to join in” as the Russian gas supply line will probably run through Turkey.

Kitsakos described the project’s plan as fully sustainable and respectful of EU principles. “We hope development begins in 2017 and that the project is completed between 2019 and 2020,” he remarked.

Energy minister Panos Skourletis noted that talks recently resumed on this prospective Russian gas supply channel to Europe, via Greece and Italy. “We believe the plan may serve the EU’s strategic objective of reinforcing energy security and offering competitive pricing,” Skourletis commented. “We consider the Russian government’s stance of wanting to promote the project only when EU regulations have been met, in order for it to proceed without interruption, as a very constructive approach,” he added.

The energy minister said the trio of partners, as a follow-up to February’s MoU, are now looking at solutions concerning source diversification and routes. “This discussion is expected to widen and involve other countries so that the project may represent part of the overall picture concerning European energy supply in the future,” Skourletis noted. “Forecasts indicate that energy needs will increase in Europe. Now is the time to shape the new plans that will effectively meet these future needs.”

Gas demand plunges to 2006 levels, modest increases seen

The country’s total natural gas consumption figure for 2014 slumped to levels recorded back in 2006, registering 2.780 billion cubic meters, substantially lower than the level of 3.645 billion cubic meters recorded in 2013.

Reduced natural gas consumption for electricity production is the main factor behind the considerable drop, according to DESFA, the natural gas grid operator.

The proportion of natural gas absorbed through facilities in Sidirokastro, close to Serres, in the country’s north, for Gazprom supply, dropped considerably to 57.9 percent in 2014 from 66.9 percent in 2013.

The proportion of LNG supplied through Sidirokasro increased to 20.5 percent in 2014 from 15.3 percent in 2013. The share of LNG supplied by Botas, the Turkish state-run crude oil and gas company, via Kipous, northeastern Greece, increased to 21.25 percent in 2014 from 17.8 percent a year earlier.

DESFA forecasts a gas demand increase to 3.542 billion cubic meters in 2016, with modest increases to levels of 3.616 billion cubic meters in 2017, 3.735 billion cubic meters in 2018, and 3.766 billion cubic meters in 2020. DESFA expects a decline to 3.39 billion cubic meters in 2022 followed by a rebound to 3.782 billion cubic meters in 2025.

Factors taken into account to determine these forecasts include consumption levels of preceding years, import levels, renewable energy source (RES) contributions, electricity production levels, and the entry of new facilities and withdrawal of older ones.

Greece’s three existing EPA gas supply companies are all expected to register demand increases, according to the DESFA study’s figures, while the new EPA supply companies covering the mainland, central Macedonia, and eastern Macedonia and Thrace are expected to begin absorbing amounts as of 2020.

Gas demand for electricity production is expected to remain stable until 2020 before declining. Demand is also forecast to remain steady in the chemical industry and heavy industry.