Greece tells Gazprom to lower gas rates or face arbitration

By Chryssa Liaggou

Greece has given Russian energy giant Gazprom a 10-day ultimatum to decide whether it will lower the price of natural gas provided to the Public Gas Corporation (DEPA) to that charged in other European countries or face arbitration.

The chairman and chief executive of DEPA, Haris Sahinis, told Gazprom Export that unless the Russian company can offer a one year retroactive rate closer to the European average of $380 per 1,000 cubic meters, the Greek government will not be able to agree.

The distance between the two sides is not that far as the Russians are reportedly open to a six months retroactive rate of $390 per 1,000 cubic meters.

The Russian side is expected to make its top-level decision within the next 10 days. The existing indications point to an inclination to bringing the rate down to what Greece is asking for, but the one year’s retroactivity appears to be a sticking point.

The word in the market is that arbitration appears inevitable. This would be the preferred solution of the country’s major natural gas consumers – electricity producers and energy-intensive industries – as they pay up to 40 percent more for the fuel than their rivals elsewhere in Europe.