ATHENS/PARIS: Greek gas supplier DEPA Commercial has filed for arbitration to seek a price revision on its gas supply contract with Gazprom, DEPA CEO Constantinos Xifaras said on Thursday.

The Greek state-controlled company is seeking a retroactive lowering of the gas price in the contract signed in 2022, as well as relief from future payments worth hundreds of millions of dollars, according to several sources with knowledge of the matter.

Asked about talks with Gazprom at the Power and Gas Forum in Athens, Xifaras said: “We have been in negotiations ... for about two years, one-and-a-half years, on price readjustment, because this is what we’ve been seeking.

“Commercial negotiations are ongoing now, they haven’t stopped, however, the company... has taken the next step which is to go to arbitration.” Gazprom did not reply to a request for comment. DEPA was not immediately available to comment on the details of the arbitration, which normally can be invoked by either party in a private long-term gas supply contract.

In January 2022, DEPA signed a contract with Gazprom for 2 billion cubic metres (bcm) of gas per year through 2026 at a price indexed to the benchmark Dutch TTF price by 80%, with the remaining 20% indexed to oil prices.

European gas prices spiked following Russia’s invasion of Ukraine and a drop in Russian pipeline deliveries, with the TTF price hitting a record high of 306 euros per megawatt-hour in August 2022.

As a result, DEPA struggled to sell its gas, and eventually was unable to accept delivery on its minimum annual amounts.

Under take-or-pay contract terms, buyers must pay for gas whether they can physically receive deliveries or not. Any untaken volumes are carried over to the end of the contract as a credit.

Part of DEPA’s claims involve Gazprom sales to Greek competitors, the sources said.

“Gazprom was not supposed to sell cheaper to DEPA’s competitors, because of course in this case it would be difficult for DEPA to take all the agreed gas,” one of the sources told Reuters.

Beginning in September 2022, Gazprom began exporting significant amounts of liquefied natural gas (LNG) to Greece from its newly launched Portovaya LNG project.

The buyer was Mytilineos, Greece’s largest private energy company, according to satellite data from analytics firm Kpler.

Mytilineos also has a Gazprom contract running to 2030.

Mytilineos declined to comment on the terms and pricing of its purchases, citing commercial sensitivity.