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Greece asks Gazprom to lower its prices

Staff writer |
Greek natural gas distributor DEPA has asked Russia's Gazprom to lower supply prices by about a fifth, to align them with those paid by natural gas users in western Europe.

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DEPA and Gazprom, Greece's biggest natural gas supplier, are already in talks to arrive at a settlement, the officials told Reuters on condition of anonymity. If no agreement is found by year-end, the Greek side may go into arbitration.

"An agreement has to be found by the end of the year, after which point either side may contractually refer the matter to arbitration," one of the sources said.

Greek government officials stated earlier this year that state-controlled DEPA would ask Gazprom for lower prices, but they did not reveal the size of the requested cut. Gazprom has already agreed to revise long-term gas supply contracts with customers in Europe, where it generates around 55% of its revenues, making "retroactive payments" to avoid losing business.

Russian company is also under pressure by European regulators investigating suspected anti-competitive pricing. Gazprom sales to Greece, which began in 1996, are not under investigation, the Greek officials said.

Gazprom is DEPA's biggest supplier, accounting for about sixty percent of purchases. DEPA imported 2.3 billion cubic metres (bcm) of Gazprom gas in 2012, compared with 2.8 bcm it can import each year under the terms of their contract, which expires at the end of 2016 and will most likely be extended.

DEPA was among the first European companies to obtain a rebate from Gazprom in 2011, of about 7%. But the Greeks are now seeking deeper cuts.

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