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23 May 2024

Daily Newsletter

OMV warns Gazprom may suspend gas supply to Austria 

Austria's energy regulator noted that a disruption in Russian gas could temporarily drive up prices. 

Shivam Mishra May 22 2024

Austrian oil and gas company OMV has announced the potential suspension of its gas supply from Gazprom, linked to a foreign court's decision.  

The Vienna-based company said that an undisclosed European energy company has secured a suspension order.  

If the order is implemented in Austria against OMV subsidiary OMV Gas Marketing & Trading (OGMT), it would be required make payments to the unnamed European energy company instead of Gazprom for the gas supply contracts.   

“In case of such an enforcement, OGMT considers it likely that Gazprom Export will halt supplying gas under the gas supply contract with OGMT, thereby affecting the Austrian gas market,” OMV said.  

However, it is not aware when such enforcement could occur. 

The cessation of most Russian gas exports to the West occurred after the start of the Ukraine conflict in 2022, leading to severed ties and sanctions against Russian energy shipments. 

Despite the potential supply issues, OMV has said that it can provide gas to its customers from alternative sources, including Norway and liquified natural gas from the global market. 

Austria's energy regulator E-Control, as reported by Reuters, has acknowledged the potential Gazprom suspension in its supply scenarios for the winters of 2024/25 and 2025/26.  

E-Control also noted that a disruption in Russian gas could temporarily drive up prices. 

Separately, Reuters, citing TASS, reported that a Russian court has prohibited OMV from initiating arbitration against Gazprom outside of Russia.  

The Court of Arbitration of St Petersburg and the Leningrad Region has also threatened OMV with a fine of €575.2m ($623.3m) if it proceeds with arbitration in foreign courts.  

This move is part of a broader strategy by Gazprom and other Russian entities to transfer international arbitration cases to Russian jurisdiction. 

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