The Austrian OMV announced that it has won an arbitration claim against Gazprom Export in a dispute over the interruption of supplies under a “German contract” and is demanding €230 million from the Russian company. Austria does not rule out also ceasing the current import of Russian gas to Austria.
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 through arbitration in January 2023, as it was forced to buy the lost volumes at a much higher price in the market.
“OMV has decided to recover compensation awarded in the amount of 230 million euros plus interest and costs, which has a positive impact on the compensation of related financial losses incurred in 2022. The Company is taking the additional measures necessary to enforce the award. arbitration with immediate effect”. – reported OMV.
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.
“Contractual relations under Austria’s supply contract with Gazprom Export are expected to deteriorate, including a possible interruption of gas supplies. In such a case, small one-off coverage losses may occur, but these will be clearly offset by the positive effects of the recovered losses,” OMV said.
According to the company, the monthly supply of Russian gas to Austria amounts to about 480 million cubic meters per month. OMV is the largest recipient of fuel from Russia, which passes through Ukraine: 40% of the transit.
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.
The day before, OMV said that it was hedging (insuring) Russian volumes a month in advance and that during the closure it would be necessary to buy the missing volumes on the spot market.
“If prices in European centers increase in response to reduced supply, we may face some risk. However, this risk is limited to the short term – a maximum of one month – and, in our opinion, financially limited.” – said the head of OMV Alfredo Popa.
He cited the forecast that a price increase of 52 euros per thousand cubic meters would mean losses for OMV of 25 million euros.
“However, please note that in this scenario we will benefit from higher prices in European gas hubs, as we produce gas ourselves. From the current point of view, the overall impact of a possible interruption of Russian gas supplies on OMV is considered quite small.” – said Alfred Stern.
Deputy Director of the National Energy Security Fund (NESF) Alexey Grivach noted EADaily that it makes no sense to talk about stopping traffic from the point of view of OMV.
“If they are allowed to pass on the likely price increases to consumers, they could certainly benefit in the short term from the transit crisis. But European consumers, European industry and the European energy system will definitely lose if traffic physically stops.” – pointed out the expert.
