Russian gas supplies to Austria could stop as early as November. OMV said it won arbitration under the German contract and plans to receive the awarded compensation of 230 million euros from payments Gazprom is obligated to make for supplies to Austria.
As reported EADaily The Austrian OMV has announced that it has won an arbitration to demand compensation from Gazprom for volumes lost under a German contract and that it will take steps to immediately begin receiving the €230 million awarded to the company.
OMV plans to withdraw them from the payments that the Russian company is obliged to make for current supplies to Austria.
“OMV is taking measures to recover from Gazprom Export the damages arising from the arbitration award in the amount of 230 million euros plus interest and costs. The arbitration award will be immediately offset by the payments that OMV must make to Gazprom Export under the gas supply contract to Austria.” – informs the company.
“Then it may happen that transit through Ukraine will be reduced almost by half on November 21 if payment is not made on November 20.” – The ICIS analyst writes in X. Tom Marzek-Manser.
OMV itself believes that relations with Gazprom will deteriorate due to the possibility that the withdrawal of funds and supplies from Russia will cease.
Austria receives about 480 million cubic meters from Gazprom every month, i.e. 5.7 billion cubic meters per year. OMV is the largest customer of the Russian company for supplies through Ukraine – 40% of transit.
Chief strategist of the investment company “Vector X” Maxim Judalov He considers that Gazprom will respond to the actions of the Austrian company so as not to set a precedent, since the company is being sued by many European traders who demand compensation for losses due to decreased supplies in 2022. At the same time, he notes the expert, the supply to Austria may not stop completely.
“Most likely not right away. But if the Austrians discount their amount, Gazprom will reduce the volume of their supplies and they will be sued for the shortfall under the current contract. And that is why they will prolong the dispute until one day it is resolved politically.” – says Maxim Khudalov.
Deputy Director of the National Energy Security Fund (NESF) Alexey Grivach I agree that Gazprom will not supply products for free.
“If they do not pay, the gas will not be supplied. According to the presidential decree on the procedure for reaching agreements with hostile countries,” – pointed out the expert.
As reported EADaily The Austrian OMV announced that it had received an arbitration award in a lawsuit against Gazprom Export under a contract under which gas was supplied to Germany. In the summer of 2022 they decreased and in September they stopped completely. The company demanded compensation of 230 million euros and filed an arbitration appeal in January 2023, as it was forced to buy the lost volumes at a much higher price on the market.
The company explained that there are no claims under the contract for the supply of Russian gas to Austria, but they do not rule out that they will cease due to the arbitration decision.
In April, Gazprom filed a lawsuit against OMV Gas Marketing & Trading with the Arbitration Court of St. Petersburg and the Leningrad Region, prohibiting the Austrian company from participating in international arbitration proceedings. Gazprom Export did not acknowledge the violation of contracts or the legality of the declared damage claims. Obviously, we are talking about the supply of gas to Germany via Nord Stream. In the summer, due to the restrictions imposed by the sanctions on the repair of the turbines of the compressor stations, the supply through the gas pipeline decreased, stopped at the end of August, and on September 26, saboteurs blew up the gas pipeline in the Sea Baltic.
Given that Austria is Gazprom’s largest customer for gas flowing through Ukraine, an extension of transit from 2025, when the five-year contract between Naftogaz and Gazprom ends, becomes even less likely.
Maxim Khudalov believes that there are still options.
“Then prospects appear for intermediary companies, such as Azerbaijan and Kazakhstan. After all, they cannot be punished for Gazprom’s debts and do not owe Gazprom any debt. – says the expert.
