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 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.
**What are the potential impacts on Europe’s gas supply if Gazprom were to halt deliveries to OMV?**
**Interview with Alfred Stern, CEO of OMV AG**
**Host:** Welcome, Alfred Stern, CEO of OMV AG. Thank you for joining us. OMV has recently announced a critical situation regarding your gas supply contracts with Gazprom. Can you explain what this dispute entails?
**Alfred Stern:** Thank you for having me. The dispute centers around the irregular gas deliveries we experienced from Gazprom and a total halt of deliveries to Germany last September. Recently, we’ve had to offset a claim against our payment obligations to Gazprom, which raises concerns about potential interruptions to our gas supplies. However, I want to emphasize that we feel well prepared for this scenario.
**Host:** Your announcement mentioned that OMV has alternative gas supplies in place. Could you elaborate on this and the current state of your gas storage?
**Alfred Stern:** Absolutely. We’ve successfully established alternative supply lines, primarily from Norway and liquefied natural gas (LNG). Currently, our gas storage facilities are over 90 percent full, which positions us favorably to meet our customers’ demands even if Gazprom were to suspend their deliveries. This readiness allows us to ensure we can fulfill our contractually guaranteed gas volumes.
**Host:** There are indications that a suspension of gas deliveries could result in financial implications for OMV. Can you share your perspective on this?
**Alfred Stern:** Yes, should Gazprom halt deliveries in retaliation for the settlement of damages we’ve been awarded, OMV may incur some minor one-off hedging losses. However, these losses would be more than compensated for by the damages we’ve received, which is a positive outcome in terms of our financial health from last year’s disruptions.
**Host:** You have previously stated that OMV is no longer dependent on Russian gas. With ongoing geopolitical tensions, how does this stance impact your long-term strategy?
**Alfred Stern:** Our reduction in Russian gas purchases is part of a broader strategy to diversify our energy sources. Even though we are still bound by a long-term supply contract with Gazprom, a cessation of their deliveries would allow us to pivot away from Russian gas altogether. This upcoming phase presents an opportunity to eliminate an unpopular component of our supply chain while reinforcing our commitment to sustainability and energy security.
**Host:** In light of recent developments, what are OMV’s next steps if Gazprom ceases all deliveries?
**Alfred Stern:** Our immediate next step involves continuing to secure additional alternative supplies to mitigate any potential gaps created by a cessation from Gazprom. We’re also evaluating our long-term contracts for any breaches that could allow us to terminate our commitment and further transition to cleaner energy sources, aligning with our environmental goals.
**Host:** Thank you, Alfred, for sharing these insights. It sounds like OMV is taking proactive measures to navigate this challenging landscape.
**Alfred Stern:** Thank you for having me. It’s imperative that we stay adaptable and prepared for whatever comes next.