The claim will now be offset against OMV‘s payment obligations to Gazprom Export from the Austrian supply contract, the Austrian company announced in the evening. This could lead to an interruption of Russian gas deliveries, warns OMV, but feels well prepared for this.
Memory 90 percent full
OMV has now set up alternative gas supplies from non-Russian gas as well as additional gas delivery capacities. Especially with gas from Norway and liquefied natural gas (LNG). “OMV confirms that the company can supply its customers with the contractually guaranteed gas volumes even in the event of a possible interruption in Gazprom Export’s supply,” the statement said. The OMV gas storage facilities are currently over 90 percent full.
This dispute concerned irregular deliveries from Gazprom Export and the complete cessation of deliveries in Germany in September 2022. The awarded damages will make a positive contribution to compensating for the financial damage incurred in 2022, OMV said today. If Gazprom were to stop deliveries in response to the settlement of the damages, OMV would incur small one-off hedging losses, which, however, would be “clearly outweighed” by the damages awarded. Gas deliveries of 5 TWh per month are potentially affected.
No longer dependent on Russian gas
OMV boss Alfred Stern had already said in July that OMV was no longer dependent on Russian gas. OMV has already significantly reduced its purchase of Russian gas. However, OMV says it cannot withdraw from the long-term supply contract, which obliges it to purchase gas from Russia in any case. If Gazprom were to stop its deliveries, this would be an opportunity for OMV to stop purchasing Russian gas. Even if, as Ukraine threatened, no more Russian gas flows through Ukraine from the turn of the year, Russia would be in breach of contract and OMV could withdraw from the now unpopular long-term supply contract. The scenario that gas from Russia will no longer come to Austria has now lost its horror.
How does the recent arbitration award impact OMV’s financial strategy and relationship with Gazprom?
**Interview with Mr. Alfred Stern, CEO of OMV**
**Editor**: Thank you for joining us today, Mr. Stern. Recent developments suggest that OMV is preparing for a potential interruption of gas supplies from Gazprom due to a dispute over an arbitration award. Can you explain what’s happening and how OMV plans to handle this situation?
**Mr. Stern**: Thank you for having me. Indeed, we’ve reached a significant point in our relationship with Gazprom. Due to ongoing issues with irregular deliveries and the complete cessation of supplies to Germany last year, we have been awarded damages by the International Chamber of Commerce. To offset this compensation, we will be adjusting our payment obligations to Gazprom Export, which could indeed lead to interruptions in gas supplies.
**Editor**: That sounds quite serious. How is OMV preparing for this potential disruption?
**Mr. Stern**: We are well-prepared. Our gas storage facilities are currently over 90% full, which gives us a robust buffer. Additionally, we have established alternative gas supplies from sources like Norway and liquefied natural gas (LNG). As of now, we are confident that we can continue to supply our customers with the contractually guaranteed gas volumes, even if Gazprom stops deliveries.
**Editor**: It’s reassuring to hear that. You mentioned that OMV is no longer dependent on Russian gas. Can you elaborate on that?
**Mr. Stern**: Certainly. Over the past year, we have taken significant steps to reduce our reliance on Russian gas. While we still have a long-term supply contract in place with Gazprom, we’ve been diversifying our energy sources. Should Gazprom halt supplies, it may actually provide us an opportunity to finally withdraw from this contract, as it would be in breach. This aligns with our commitment to energy security and sustainable sourcing.
**Editor**: If Gazprom ceases its deliveries, what kind of financial impact are you anticipating for OMV?
**Mr. Stern**: While we expect some minor one-off hedging losses, these would be clearly outweighed by the damages awarded to us. We see this as a necessary step in navigating a complex market and emerging stronger from these challenges. The landscape is changing rapidly, and it’s crucial that we adapt accordingly.
**Editor**: Thank you for your insights, Mr. Stern. It sounds like OMV is strategically positioning itself for the future.
**Mr. Stern**: Thank you. We remain committed to ensuring a reliable gas supply for our customers and exploring sustainable energy options moving forward.