For example, the 15-year contract recently signed by Hungary has a clause modifying the quantities purchased only after 10 years. The agreement with Bulgaria is older and carries an old burden, a take or pay clause, in which the buyer pays even if he has not accessed all the gases provided in the contract. In the context of the gas crisis, in which Russia has a major role, the European Union will consider the option for Member States to purchase natural gas together as the bloc seeks ways to protect itself from the sharp rise in energy prices, Euractiv reports.
The European Commission will publish this week a set of measures that bloc member states can take in response to the energy crisis. Countries could jointly purchase gas to form a strategic reserve, and participation in such a scheme would be voluntary.
Not all countries want a common bloc-level response to the energy crisis. Germany and the Netherlands have warned against market intervention, while Belgium has expressed doubts that such a scheme would curb rising prices.
Other states, especially in the east of the continent, have long-term contracts with Gazprom, which include burdensome clauses.
Hungary recently signed such a contract with Gazprom, for a period of 15 years, with a clause modifying the quantities purchased only after 10 years. The agreement to deliver 4.5 billion cubic meters of gas a year will account for half of Hungary’s gas consumption and guarantee deliveries through new routes, eliminating Ukraine as a transit country.
“Today, the reality is that Hungary’s energy needs can be most safely covered by a long-term contract with Gazprom,” said Hungarian Foreign Minister Peter Szijjarto at the signing of the agreement, according to Euronews.
Russia has also offered Bulgaria, the EU’s poorest state, a long-term contract with Gazprom. Russian Ambassador to Bulgaria Elena Mitrofanova has urged Bulgaria to sign a new long-term contract with Gazprom, Euractiv writes. “Especially in the context of rising spot prices, stable long-term contracts are of great importance, as life shows,” Mitrofanova said. The current contract contains a take or pay clause in which the buyer pays a minimum amount even if, for various reasons, he did not take the entire amount from the seller.
So far, Bulgarian institutions have not reacted to its comments, but opposition to Russia’s offer will be severe in the new parliament. Economist Martin Dimitrov points out that for Bulgaria’s interests, it is best to limit the possible contract to two or three years.
Serbia, meanwhile, is facing “difficult negotiations” with Russia over a 15-year contract, the country’s president, Aleksandar Vucic, said recently. Serbia, which is almost entirely dependent on Russia for natural gas, is relying on Russian President Vladimir Putin’s support in negotiating a new contract with Gazprom at a favorable price, he added, according to Bloomberg.
Serbia is paying $ 270 per 1,000 cubic meters of gas under the contract, which expires in December, well below the reference price.
Meanwhile, Moldova has sought help from EU countries after Russian giant Gazprom cut its deliveries to the country, the Financial Times notes. Country officials are unwilling to accept new terms with Gazprom that would include significantly higher prices.
Deputy Prime Minister Andrei Spinu said Moldova is negotiating a new contract with Gazprom, but is also examining alternative gas supply routes.
Serbia pays 270 dollars per 1,000 cubic meters of gas under the contract expiring in December, well below the reference price.
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