Gazprom's potential delivery halt cautioned by OMV
Austria relies heavily on Russia for its energy needs. Recently, the Austrian gas and oil company OMV has issued a warning that a foreign court ruling may lead to Gazprom halting gas deliveries, which could have serious consequences for the country's supply.
OMV revealed during the night that it was aware of a foreign court ruling obtained by a major European energy company. If enforced in Austria, this judgment could compel OMV to make payments to this company. The Vienna-based firm has not disclosed any details about the judgement or the identity of the energy company. Nor has it provided any information about when or if the enforcement will take place. If the enforcement occurs, OMV believes it's probable that Gazprom will stop providing gas to Austria. OMV is obligated to inform its customers about potential disruptions in gas supplies.
The Austrian regulatory authority, E-Control, assured the public that the country's gas supply will be secure during the upcoming winter season. Their statement highlighted that domestic natural gas storage facilities are currently around 77% full and that alternative import options are available through Germany and Italy. They also mentioned that a disruption in OMV's gas delivery doesn't necessarily imply a reduction in gas supply to the EU or Austria via Ukraine. However, E-Control did acknowledge that temporary price hikes are a possibility.
Erste Group analysts have stated that the risk of foreclosure is relatively low. If it were to transpire, OMV could potentially replace the Russian gas, but at a significantly higher cost. On the Vienna Stock Exchange, OMV shares saw a 1.9% decline, dropping to €47.16.
Austria imports over 90% of its gas from Russia, and OMV has a contract with Gazprom to supply their market until 2040. Furthermore, there's a contract for Germany which currently isn't in use because Gazprom has discontinued deliveries. According to E-Control, 60-65 TWh are required for the winter months depending on the weather conditions and consumer behavior. OMV doesn't solely purchase gas from Russia, but also acquires it from its production facilities in Norway and Austria, as well as from international producers. It also holds long-term LNG supply contracts and participates in the EU gas purchasing platform auctions.
There are ongoing legal disputes between OMV and Gazprom. As reported by the Russian news agency TASS, a Russian court has barred OMV's gas trading subsidiary from participating in arbitration processes outside Russia or else face a fine of €575.2 million. According to OMV, the case involves gas supply contracts. OMV has filed for arbitration proceedings in Stockholm. They perceive the Russian proceedings as unlawful. "We do not recognize the jurisdiction of the Russian courts and consider Gazprom Export's application to be unsubstantiated. We have appealed to the Russian court," stated OMV. The Commercial Court in St. Petersburg had previously ruled in April that another case could not proceed before the Court of Arbitration in Paris. According to earlier statements made by OMV CEO Alfred Stern, these proceedings concern OMV's involvement in the Siberian natural gas field, Yuzhno-Russkoye. OMV was expropriated there by decree, along with the German oil and gas company Wintershall.
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Source: www.ntv.de
