Thermal producers, DEPA at odds over 2017 gas deal terms

Ongoing negotiations over the past few weeks between DEPA, the Public Gas Corporation, and most of the country’s independent gas-fueled electricity producers, in search of new annual gas supply deals for 2017, are proving especially difficult this year as a result of the unique conditions brought about by the current winter’s energy crisis.

Unprecedentedly, all major consumers are seeking maximum gas amounts, prompting DEPA to seek additional orders in order to meet demand.

In response, DEPA is seeking to include a clause in its new annual agreements with the thermal electricity producers that would enable the gas company to raise prices when demand remains high over extended periods and requires DEPA to pay higher amounts for its gas orders, including extraordinary LNG shipments through the spot market.

The thermal producers have already voiced their objections to such a prospect. They contend that existing agreements include clauses specifying the maximum daily and annual gas amounts DEPA is obligated to supply to each company. The existing agreements also include formulas determining price levels based on the types of gas DEPA receives from its steady suppliers.

All but one of the country’s thermal producers are currently engaged in talks with DEPA for new supply deals covering 2017. Heron is not involved as the producer has already signed a long-term agreement with DEPA.

The independent thermal producers, most of which renew their agreements with DEPA on an annual basis, also contend that they should not be treated differently to Heron and PPC, the Public Power Corporation, both holders of long-term agreements with the gas corporation.

Thermal producer company representatives told energypress that DESFA, the natural gas grid operator, should be responsible for managing the energy crisis, not DEPA, as it is a trading company, even if state-controlled.

It remains unknown when the gas-deal talks between for the thermal producers and DEPA will conclude. Agreements reached will apply retroactively as of January 1, 2017.