Austrian OMV terminates gas supply contract with Russian Gazprom

Austrian energy company OMV has announced the cancellation of its long-term natural gas supply contract with Gazprom Export.

The contract, which was signed in 2006 and was set to remain in effect until 2040, has been terminated due to what OMV described as "numerous material breaches of contractual obligations" by the Russian company, Caliber.Az reports citing Russian media.

In a statement released on its website, OMV confirmed that the cancellation is effective immediately, following the publication of the announcement. The decision comes after Gazprom’s subsidiary halted gas deliveries to OMV on November 16 of this year.

OMV stated that it is well-positioned to meet its obligations despite the termination of the contract, with its gas storage facilities 85 per cent full. The company noted that it will rely on alternative sources to supply gas, including its own production in Norway and Austria, third-party gas suppliers, and additional long-term LNG supplies.

The OMV-Gazprom gas supply contract was intended to last until 2040. In December 2023, 98 per cent of Austria’s gas imports came from Russia. However, this figure began to decline at the start of 2024, dropping to 97 per cent in January and further to 87 per cent in February.

By Vafa Guliyeva