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 is OMV adapting its energy strategy to reduce reliance on Russian gas amidst the changing geopolitical landscape?**
**Interview with Alfred Stern, CEO of OMV**
**Interviewer:** Good afternoon, Mr. Stern. Let’s dive right into the current situation regarding your gas supply agreements with Gazprom. There are reports that OMV’s claim against Gazprom could potentially disrupt Russian gas deliveries. Can you elaborate on what this means for OMV and its customers?
**Alfred Stern:** Good afternoon. Yes, as you’ve mentioned, we have filed a claim that offsets against our payment obligations to Gazprom Export as part of our long-term supply contract. This claim stems from irregular deliveries and the complete halt of supplies to Germany in September 2022. While this situation could lead to an interruption in gas deliveries, I want to emphasize that OMV is well-prepared for such an eventuality. Our gas storage facilities are currently over 90 percent full, which allows us to continue delivering contractually guaranteed gas volumes to our customers without immediate reliance on Gazprom.
**Interviewer:** That’s reassuring to hear. Can you discuss the alternatives OMV has established in case of a disruption?
**Alfred Stern:** Certainly. We have significantly diversified our gas sources. We are now sourcing more gas from Norway and utilizing liquefied natural gas (LNG) to supplement our domestic supply. This strategic shift was essential, especially given the current geopolitical climate, and it has enabled us to reduce our dependency on Russian gas substantially. While we still have a contractual obligation to purchase Russian gas, we are creating a situation where our reliance is minimized.
**Interviewer:** Some analysts have speculated that if Gazprom decided to halt deliveries, it might breach the contract, potentially allowing OMV to withdraw from it. What are your thoughts on this?
**Alfred Stern:** This situation is indeed complex. Should Gazprom cease its deliveries, it would be in breach of our contract, which could provide OMV with the opportunity to terminate our long-standing agreements. It’s important to note that we are focused on our operational capacity and ensuring our supply chain remains robust in any scenario. Our strategic pivot away from reliance on Russian gas is already underway, and we are prepared for various outcomes.
**Interviewer:** In light of the ongoing tensions, do you think the European reliance on Russian gas is fundamentally changing?
**Alfred Stern:** Absolutely. The situation has prompted a significant transformation in Europe’s energy landscape. Companies like OMV are reassessing their energy strategies, seeking alternative sources and increasing investments in renewables and LNG. Many of us are committed to becoming more energy-independent, which is critical not only for business continuity but also for geopolitical stability.
**Interviewer:** Thank you for your insights, Mr. Stern. It seems that while challenges persist, OMV is taking proactive measures to adapt to the evolving energy landscape.
**Alfred Stern:** Thank you for having me. Indeed, while we face uncertainties, we are committed to ensuring our customers remain supplied and moving towards a more diversified energy future.