Italian oil major ENI is considering revising the so-called ‘take or pay’ rule in its contracts with Russian gas giant Gazprom, three years after it managed to get a discount on gas supply.
ENI might “not renew ‘take or pay’ contracts and try to rework the ones that are still in force,” to avoid the ‘take or pay’ rule as it has become too expensive, La Repubblica newspaper cited ENI’s CEO Paulo Scaroni. Gazprom's current contract with Eni expires in 2035.In 2011 losses from the company's gas sales sector totaled 600 million euro, he stressed. ENI also had to pay gas suppliers about 1.5 billion per year between 2009 and 2011 for gas it hadn’t used under ‘take or pay’ contracts. However, Scaroni stressed, security of supplies must be taken into consideration when revising contracts. The Italian major hasn’t formally requested the change, Russia’s Vedomosti daily reports citing its sources. But Gazprom is likely to make concessions to ENI, because the Italian company is a one of the major customers of Gazprom and a key partner in the South Stream gas project, the source suggested. On Monday Gazprom Export declined to comment on Scaroni’s remarks.Since the beginning of the financial crisis in 2008, ENI has twice managed to get discounts from Gazprom on gas prices totaling $1.3 billion, and a reduction in the minimum annual contracted volumes. Along with Germany’s E.ON, Italy’s ENI became the first European company to get a deal on tariffs from Gazprom.Earlier this year Gazprom revised tariffs with Wingas (Germany), GDF Suez SA (France), EconGas GmbH (Austria), SPP AS (Slovakia) and Sinergie Italiane Srl. These companies purchase around 35 billion cubic meters (bcm) of gas every year or about a quarter of all Russian gas exports to Europe.