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Greece to pay Gazprom without sanctions violation; Plan B for gas supply

“Greece will pay Gazprom in a way that will not violate sanctions and will ensure the country’s energy efficiency,” Energy Minister Costas Skrekas said on Thursday, following a gas supply emergency meeting chaired by the Prime Minister. the Greek government has worked out a Plan B for the case that Russia would cut off the gas supply to the country, even though there is a so-called “double-account mechanism” where payments in euros are converted into rubles.

Minister Skrekas said that Greece will pay to Gazprom on May 20 for the supply it received for the previous month and added that gas consumption reaches 50% and sometimes exceeds it.

Russian gas accounts for more than 30% of Greece’s annual energy needs. Greece’s contract with Gazprom expires in 2026.

“All measures have been taken for the country’s energy efficiency,” Skrekas assured.

He stressed that within a month, “we will have a new floating LNG storage unit in Revythousa, while with the new liquefied gas installation in Alexandroupolis in 2023 we can say that we will be completely independent from the Russian gas.”

“If Russia cuts off our gas supply, say on May 20-21, the country has taken measures so that we do not turn the switch off. There is no way to turn it off. There is no way we can be surprised in this direction,” said government spokesman Giannis Oikonomou, speaking after the emergency meeting at the Prime Minister’s office on Wednesday.

Paying in euros, getting rubles

“Greece has always paid in euros and will keep paying in euros,” a government official told news website newsit.gr.

Speaking on conditions of anonymity, the official said that there is a double-account mechanism already used by some European countries to prevent “violent” interruption of their gas supply from Russia.

How does the double account work? One country pays its debt in euros to an account at Gazprombank, the bank converts the currency and transfers the amount to a second account at Gazprom in rubles.

The government insists that this is a technical issue and that its fault will not disrupt the country’s supply of Russian gas.

Gas importers standby

The issue of payments for Russian gas imported by Greece through the companies DEPA, Mytilineos Group, Prometheus Gas and Public Power Corporation was discussed and examined at the meeting on Wednesday.

The latter imports gas directly from Gazprom after the assignment of part of the contract of Prometheus Gas for the years 2022 and 2023. All four companies will have to pay for April’s consumption within the latter part of May.

The crux of the discussion at Wednesday’s meeting is that they expect a clear and binding decision from the Commission to act accordingly, daily kathimerini reported.

“We are under control and we have time to make decisions,” DEPA sources said. DEPA imports two-thirds of the Russian quantities of gas that enter the Greek market.

The contracts of the Greek companies expire in 2026 for DEPA, Prometheus and PPC and in 2030 for Mytilineos, while they also include take-or-pay clauses.

Plan B if Russia cuts off gas supply

The Greek government has reportedly worked out a Plan B in the event that Russia would stop supplying Europe as well as Greece.

The alternative plan for the energy efficiency of the country envisages:

-Acceleration of the procedures for a new floating liquefied natural gas (LNG) storage unit in Revythousa. The new reservoir is expected by July at the latest, so the capacity of the terminal will increase from 225,000 m3 today to more than 380,000 m3.

-Lignite units are ready to be put into operation again and to replace the gas units for the production of electricity.

-Five electricity generating units that run on natural gas are ready to run, if necessary, with diesel.

-Public Power Corporation (PPC) has prepared an annual plan for increased lignite mining over the next two years by 50% and its availability in factories.

-Increase the flow of natural gas flows from Azerbaijan through TAP pipeline.

-DEPA Commerce closely monitors the availability of LNG cargo in international markets in order to procure additional cargo if deemed necessary.

– The storage of gas in Italy for the maintenance of strategic reserve and the submarine storage in Kavala is promoted.

– Investments in RES are accelerating, “as the increase in green energy production will shield the country from imported crises”, as government sources point out.

The Plan B stipulates also the completion of critical infrastructure that will enhance the country’s energy security, such as the Greece-Bulgaria IGB and Greece-Northern Macedonia gas interconnectors, the new LNG terminals in Corinth and Alexandroupolis s well as the electricity interconnections with neighboring countries, such as Egypt.

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4 comments

  1. Checkmate Putin. Checkmate Ruble which is now an international commodity country, Checkmate USA for selling us 5x more expensive Fracked LNG gas from USA. Checkmate the energy companies in Greece who will profit more from higher MARKET SPOT prices, as long term contracts wont be possible for pricing LNG on ships.

    Losers are the Greek people who will pay more for GAS and everything else. Also the environment (Fracking of Gas, Conversion and De conversion to LNG, Shipping the products to Greece from USA or Maybe QATAR, reopening of Lignite or Deisel production of Electricity)

    What a terribly misjudged implementation of sanctions

  2. Well said but we must not forget that the losers will also be Ukraine as Russia will continue to be able to finance this horrendous war.