Greek gas supplier DEPA Commercial has decided to seek arbitration over its gas supply contract with Gazprom, DEPA CEO Constantinos Xifaras was quoted by local media.
The Greek state-controlled company is seeking a lowering of the price on the long-term contract signed in 2022.
Asked about talks with Gazprom at the Power and Gas Forum in Athens, Xifaras said: “We have been in negotiations with our other supplier for about two years, one-and-a-half years, on price readjustment because this is what we’ve been seeking.
“Commercial negotiations are ongoing now, they haven’t stopped, however, the company… has taken the next step which is to go to arbitration.”
Gazprom did not reply to a request for comment. DEPA was not immediately available to comment on the details of the arbitration which normally can be invoked by either party in a private long-term gas supply contract.
In 2022, the Greek company signed a contract with Gazprom for 2 billion cubic metres of gas per year through 2026 at a price indexed to the benchmark Dutch TTF price by 80%, with the remaining 20% indexed to oil prices.
European gas prices spiked following Russia’s invasion of Ukraine and a drop in overall Russian pipeline supply west, with the TTF price hitting a record high of 306 euros per megawatt-hour in August 2022.
DEPA sought to revise its price downward given the new market conditions, under its contract, but Gazprom declined, the sources said.
As a result, DEPA struggled to sell its gas and eventually was unable to accept delivery on its minimum annual amounts.
Under take-or-pay contract terms, buyers must pay for gas whether they can physically receive deliveries or not — any untaken volumes are carried over to the end of the contract as a credit, Reuters reports.
