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.
How is OMV planning to diversify its gas supply sources to enhance energy security in light of the current geopolitical landscape?
**Interview with Alfred Stern, CEO of OMV AG**
**Interviewer:** Thank you for joining us today, Alfred. Recent developments indicate that OMV has taken a significant step regarding its relationship with Gazprom. Can you explain what has led to this situation?
**Alfred Stern:** Thank you for having me. The situation stems from ongoing disputes over gas deliveries from Gazprom, which have been irregular and culminated in a complete cessation of flows to Germany last year. OMV won an arbitration award against Gazprom for previous supply issues, and we decided to offset this award against our payment obligations under the current supply contract. This approach could potentially lead to interruptions in gas supplies from Russia.
**Interviewer:** That sounds quite serious. How prepared is OMV to handle a possible disruption in gas supplies from Gazprom?
**Alfred Stern:** We are well-prepared. Our gas storage facilities are currently over 90 percent full, which provides us a solid buffer. Additionally, we’ve established alternative supply routes, focusing on sourcing gas from Norway and increasing our capacity for liquefied natural gas (LNG). Thus, we are confident in our ability to meet the contractual volumes for our customers, even if Gazprom ceases deliveries.
**Interviewer:** You mentioned that OMV is no longer dependent on Russian gas. Can you elaborate on your current stance regarding Russian gas imports?
**Alfred Stern:** Yes, we have significantly reduced our reliance on Russian gas imports over the past year. While we are still bound by long-term contracts with Gazprom, we believe that if deliveries were to stop as a reaction to our recent arbitration settlement, it would give us a unique opportunity to reconsider our long-term commitments in light of the current geopolitical landscape. Ultimately, we want to be aligned with our strategic goals of energy independence and sustainability.
**Interviewer:** If Gazprom does stop deliveries, what are the financial implications for OMV?
**Alfred Stern:** Should Gazprom cease its supply to OMV, we anticipate facing some minor one-off hedging losses; however, these would be significantly outweighed by the damages awarded through arbitration. We’re managing our risks carefully, and we believe that we can navigate any temporary disruptions without severe impacts on our financial health.
**Interviewer:** It’s imperative for companies like OMV to adapt in these changing times. What is your outlook on future gas supply security for Austria?
**Alfred Stern:** Our outlook remains cautiously optimistic. By diversifying our supply sources and increasing our investments in alternative gas supplies, we are proactively securing our energy future. Ensuring energy supply security is a priority, especially in light of current market dynamics, and we are committed to driving this transition effectively.
**Interviewer:** Thank you, Alfred, for sharing these insights. We look forward to seeing how OMV navigates this challenging landscape.
**Alfred Stern:** Thank you for having me. It’s an important conversation, and I appreciate the opportunity to discuss our plans and strategies.
