DEPA-Gazprom Agree on Reducing Natural Gas Price

gazpromRussian gas exports company, Gazprom has agreed to cut its price for DEPA, Greece’s state-run natural gas distributor. The two sides were negotiating during the last months, with the Greek company asking for a cut of about 20%.

As reported by the Greek Environment Ministry, on Tuesday, Depa and Gazprom have agreed on a price cut of 15%. The price agreed is below 400 dollars per 1,000 cubic metres of natural gas, down from the $470 DEPA pays now.

The meeting between the Russian President Vladimir Putin and the Greek Prime Minister Antonis Samaras was crucial for the successful outcome of the negotiations. This new price is one of the lowest compared to Greece’s neighboring countries. Furthermore, it is lower than the existing prices of spot LNG.

The lower prices will apply retroactively from June 2013, which means that both industrial and domestic consumers of natural gas will benefit from the discount. The contract that expires at the end of 2016 will be extended to 2026, with Gazprom to supply DEPA between 2.5-3 billion cubic metres a year.

The new agreement will help DEPA and therefore its major clients (Greek industries) to meet their energy needs and it will have an immediate positive impact on their financial planning.