New gas supply contract: what are the terms and conditions of the contract between the countries?
Gazprom Corporation is increasing its exports to European countries. The other day it signed a contract for gas supply to Greece. The Russian producer signed a long-term cooperation contract with Mytilineos S.A., which is to last until 2030.
According to Gazprom representatives, this document proves once again that Europe sees Russia as a partner and needs its raw materials. The parties to the agreement are sure that the new agreement will strengthen economic ties between the two countries.
Thanks to the contract with the supplier, Mytilineos will be able to strengthen its position in the Greek market and attract new customers from the industrial sector.
It should be noted that this contract is not the first cooperation between the partners. For the first time Gazprom and Mytilineos entered into a gas supply contract in 2017, but the agreements were on short-term conditions. Last year about 588 million cubic meters of Russian fuel was exported. This year the parties decided to continue the cooperation, but on long-term conditions.
Mytilineos is one of the largest industrial concerns, it holds leading positions in such spheres as metallurgy, construction, and the electric power industry. Besides, the company is engaged in electricity and gas trading. The volume of its revenues is about 2.3 billion euros. Mytilineos has branches in other countries and employs 3380 people in total.
Some time ago Mytilineos and Gazprom were considered competitors. The companies took part in a competition for the possibility of privatizing DEPA, a gas distribution company based in Greece. However, Gazprom withdrew the bid, and the tender itself was difficult and ended in a scandal.
Gas supplies from Russia to Greece started back in 1996 under a contract signed with the USSR in 1988. According to the new document, the volume of sold fuel was to be 3 billion cubic meters annually, such conditions were in force until 2016, and in 2014 the contract was extended until 2026. Last year, Russian gas exports to Greece decreased by almost 27% compared to 2018.
It should be noted that a significant increase in supplies would help the Turkish Stream pipeline, if the route through Greece and Italy was chosen for it. However, its network was laid through Bulgaria and Serbia, and then it went to Austria through Hungary.
In addition to gas from Russia, Greece buys LNG, and a large share of imports is owned by producers from Algeria. As raw material prices are falling, the government plans to increase supplies to reduce coal consumption. As in many European countries, Greece refuses to use solid fuel because of the huge amount of emissions into the atmosphere when using it.