Greece is looking for cheaper gas from Russia

Of Thanks to Floudopoulos

Greece is reportedly stepping up its efforts to secure gas from Russia on more competitive terms, starting in 2022.

Preliminary contacts between DEPA and Gazprom have already begun, while today and tomorrow the 13th Joint Greek-Russian Inter-Ministerial Committee will be held in Moscow, in view of the visit that Prime Minister K. Mitsotakis will pay to Moscow in early December.

In terms of energy, the agenda includes a wide range of issues (in the fields of oil, electricity, renewable energy and energy saving), but the issue of gas is very high on the agenda, due to the develop energy crisis.

It is worth noting that DEPA’s contract with Gazprom expires in 2026, however, every year discussions are held on how to price and manage the take or pay clause included in the contract.

In terms of pricing, the contract with Gazprom is 100% oil indexed, ie fully linked to international oil prices.

However, for both 2020 and 2021, there was an agreement between the two parties for an emergency modification, because oil was very expensive and LNG cheaper, so DEPA asked for and received (like other companies in Europe) the pricing of a large percent of Russian gas at prices linked to the TTF and not oil.

For this year (ie for the gas of 2022), where things are exactly the other way around, ie LNG is expensive and oil is cheaper, it is the Russians who are asking for the 100% oil indexed not to apply, but to follow a hybrid model like the 2020 and 2021 linking part of the quantities sold to the TTF.