Gazprom discusses extending Greek gas deal until 2040

The head of Russia’s Gazprom held talks yesterday on extending its long-term gas supply contract with Greece from its current expiry date in 2016 until 2040, both sides said. Greece’s Development Ministry estimates 80 percent of the country’s gas supplies come from Gazprom, which is Russia’s monopoly exporter. «We discussed extending the contract through to 2040,» Greek Development Minister Dimitris Sioufas said in a statement after meeting with Gazprom Chief Executive Alexei Miller in Athens. «We agreed that negotiations will continue… to sign an agreement.» Gazprom supplied about 2.74 billion cubic meters of gas to Greece last year and expects demand from the electricity sector, industry and consumers to grow to 6.5 billion cubic meters by 2010. Miller also met with Prime Minister Costas Karamanlis and discussed opportunities for Gazprom presented by the liberalization of Greece’s energy market. Greece has diversified its energy supply over the past 10 years, partly through increased natural gas use, in an effort to wean itself off expensive oil and polluting coal power. «We have to extend the agreement to supply Greece with Russian gas through to 2040,» Miller said in a statement. «We are sure that we will have reached an agreement in principle by the end of this year.» Gazprom already supplies a quarter of Europe’s gas and its share will rise in coming decades. It is keen to expand its reach by getting access to end users of gas and gaining more of the revenues from consumers. Earlier this year, Russia signed a deal with Greece and Bulgaria to build an oil pipeline between the Bulgarian port of Burgas on the Black Sea and Alexandroupolis on Greece’s Aegean coast. The pipeline, which aims to bypass the congested Turkish Bosporus Strait, is 51 percent-owned by three Russian state-controlled companies, one of which is Gazprom’s oil subsidiary Gazprom Neft. Gazprom said Miller discussed the Burgas-Alexandroupolis pipeline on his trip to Greece, but gave no further details. (Reuters)

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