With clear government guidelines, the head of Greece’s Public Gas Corporation (DEPA), Haris Sahinis, will make a final attempt in the nextfew days to persuade Russian energy giant Gazprom to draw up a new contract for the country’s natural gas supply.
Gazprom’s last offer was for a supply rate just above $400 per 1,000 cubic meters, which would be six months retroactive, but Athens wants to reduce the price further. Today the supply rate stands at $460 per 1,000 c.m., so the Russian proposal amounts to a reduction of just over 13 percent. The average rate in Europe stands at $365 per 1,000 c.m.
Given the above, and under the pressure from local industries, the government has not ruled out out the option of arbitration. The Greek side will reportedly accept a deal with a further small lowering of the rate and a small increase in its retroactivity, or a major improvement in either the rate or the retroactivity. Anything else will not be accepted and the government has ordered Sahinis to resort to arbitration if Gazprom fails to agree. DEPA has already been in contact with the legal firm used by its German peer RWE, which resorted to arbitration and forced Gazprom to make significant discounts.