Austrian energy group OMV terminates gas supply contract with Gazprom

Austrian energy group OMV said on Wednesday that it had terminated its natural gas supply contract with Gazprom. It accuses the Russian state-owned company of repeated “serious breaches” of the contract, which was originally due to run until 2040. The German news agency DPA reported the news on Wednesday.

Gazprom stopped supplying gas to OMV in mid-November. This came after the Austrian company suspended payments to Gazprom in order to recover an amount awarded to it in arbitration. The court awarded OMV more than 230 million euros (5.8 billion Kč) in compensation.

The contract between OMV and Gazprom, signed in 2006, was initially praised by politicians on both sides, but also faced criticism over its long-term nature and terms. For example, the contract stipulated that the buyer had to pay for gas even if it did not take delivery. This ran counter to the European Union’s efforts to quickly end its dependence on Russian gas.

OMV, which supplies gas in Austria exclusively to industrial customers, ruled out the possibility of a gas shortage in the country. “Today we can draw on a diversified portfolio of alternative gas sources and thus guarantee security of supply for our customers,” said OMV Chief Executive Alfred Stern.

According to its own figures, OMV can source gas from its own production in Norway and Austria, from external gas producers, and in the form of liquefied natural gas. Gas storage facilities in Austria are around 85 percent full, according to the company.