KEY POINTS
- OMV terminates its gas supply contract with Russia’s Gazprom.
- Since November 16, 2024, no deliveries of natural gas have been made by Gazprom to OMV.
- Kyiv refuses to extend a five-year transit agreement that brings northern Siberian gas to Europe.
VIENNA: Austria’s energy company OMV has terminated its contract with Russian energy giant Gazprom due to the suspension of gas supplies.
Last month, Gazprom halted gas supplies to OMV hours after Vienna said Russia had given notice it would cut off flows.
“OMV today announced the termination of its long-term natural gas supply contract with Gazprom Export in reference to multiple fundamental breaches of contractual obligations by Gazprom Export. This termination takes immediate effect. The subject contract originates from 2006 and stipulates a term until 2040. Since November 16, 2024, Gazprom Export has halted gas deliveries to OMV,” the company said in a statement.
The OMV used to receive approximately 7,400 MWh per hour, corresponding to approximately 5 TWh per month, at the Austrian-Slovakian border, the company added.
Russia was supplying gas to Australia through the Soviet-era Urengoy-Pomary-Uzhgorod pipeline via Ukraine. Earlier, Kyiv refused to extend a five-year transit agreement, which brings northern Siberian gas to Slovakia, the Czech Republic, and Austria.
“The potential risk exposure of OMV Gas Marketing & Trading (OGMT) is significantly reduced by terminating the Austrian supply contract with Gazprom Export. The supply volumes of the contract with a single-digit million euros margin potential per annum have been fully diversified with alternative gas sources over the last three years,” the statement reads.
Russia, which before the Ukraine war was the biggest supplier of natural gas to Europe, has lost almost all of its European customers.
Austrian Chancellor Karl Nehammer in a post on X said that Russia’s attempt to weaponise energy “didn’t work.” “Austria will not allow itself to be blackmailed by Russia,” he said.
According to the OMV its gas storage facilities are currently about 85% full, ensuring stability for customers amid the transition. OMV supplies about 30% of the Austrian gas market, and its biggest shareholder is the Austrian government.
Alfred Stern, Chairman of the Executive Board and CEO in a statement said: It is OMV’s key priority to always be a reliable supplier to our customers in any markets and countries we operate in. Being fully cognisant of this profound responsibility, we have continuously implemented our diversification strategy for gas supply sources and additional pipeline capacities.
