Austrian company terminates contract with Gazprom
12 December 12:08
The Austrian energy company OMV has terminated a long-term natural gas supply agreement with Russia’s Gazprom, which has stopped supplying natural gas to Austria. This is stated on the OMV website, Komersant ukrainskyi reports.
It is noted that the company terminated the contract due to fundamental violations of contractual obligations by Gazprom.
“OMV no longer has any supply contracts with Gazprom Export and no business in Russia. Since November 16, 2024, 06:00 CET, no natural gas supplies from Gazprom Export to OMV have been made,” the statement said.
The agreement between Austrian OMV and Russian Gazprom was signed in 2006 and was valid until 2040. According to it, OMV received approximately 7,400 MWh per hour, which corresponds to about 5 TWh per month, at the Austrian-Slovak border. However, all supplies stopped on November 16.
“OMV’s key priority is to always be a reliable supplier for our customers in all markets and countries where we operate. Fully aware of this deep responsibility, we are continuously implementing our strategy of diversifying our gas supply sources and additional pipeline capacity. Thanks to the successful efforts of our gas working group over the past three years, OMV is well positioned to utilize our diversified portfolio of alternative gas sources, ensuring security of supply for our customers,” said OMV Chairman of the Board and CEO Alfred Stern.
It is noted that the potential risk of OMV Gas Marketing & Trading (OGMT) is significantly reduced due to the termination of the Austrian supply contract with Gazprom Export. Supply volumes under the contract with a single-digit margin potential of one million euros per year have been fully diversified with alternative gas sources over the past three years.
As part of OMV’s ongoing diversification strategy, its gas portfolio includes several sources of supply from its own gas production in Norway and Austria, third-party gas producers, and additional long-term LNG volumes. OMV’s gas reserves in Austria are currently around 85 percent.
As a reminder, on November 16, Gazprom suspended gas supplies to Austria after the Austrian company threatened to confiscate some of the Russian state-owned company’s gas as compensation for the arbitration it won over a contractual dispute.
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Geopolitical context
Austria has long been one of Gazprom’s most reliable customers, even as most EU countries have switched to imports from other sources, such as Norway or the United States. However, since the outbreak of the war, Austria, which remains politically neutral, has begun to gradually reduce its dependence on Russian gas.
According to the sources, the Austrian company still receives Russian gas through Slovakia, where Gazprom’s volumes are resold by the local supplier SPP.
Austrian Chancellor Karl Negammer said that Moscow is using energy resources as a weapon and called for the creation of conditions for OMV to withdraw from contracts with Gazprom. Energy Minister Leonore Gevessler emphasized that the decision on contracts should be made by the company itself, and the government will support this process.
Thus, OMV’s decision to stop purchasing Russian gas marks the end of an era of long-term cooperation between Austria and Russia in the energy sector. This is not only an economic but also a political signal that may affect future relations between the two countries.
