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Austria’s half-century exclusive ties with Gazprom ended with gas seizure, sources say
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Austria’s half-century exclusive ties with Gazprom ended with gas seizure, sources say

By Alexandra Schwarz-Goerlich and Dmitry Zhdannikov

VIENNA/LONDON (Reuters) – The trigger that ended more than 50 years of gas flows from Russian energy giant Gazprom to OMV earlier this month was the Austrian group’s seizure of Russian gas as payment to cover the value of an arbitration award, according to five sources. told Reuters.

OMV was one of the few remaining buyers of Russian gas in Europe after Gazprom lost almost all its customers there following Russia’s invasion of Ukraine in 2022. Before the start of the war, Russia was the largest natural gas supplier in Europe.

On November 13, OMV announced that it had won an arbitration in Germany against Gazprom for 230 million euros ($239 million) in relation to irregular deliveries to its German subsidiary, and that it would take steps to make immediately claim Gazprom’s invoices.

Three days later, Gazprom suspended its gas deliveries to the Austrian company.

According to three sources close to Gazprom and OMV, the Austrian company had seized 230 million euros worth of gas deliveries for the month of October. It was the first time that a European Union customer did not pay for Gazprom’s gas, one of the sources close to Gazprom said.

A source close to OMV said it considered taking Gazprom’s gas deliveries for October in lieu of the arbitration award to be the last chance to do so if Ukraine, which plans to terminate to an agreement allowing Russian gas to transit through its territory next year, would interrupt Russian gas flows. in January.

Gazprom considers the gas seizure to be non-payment and has therefore cut off supplies, a source close to Gazprom said.

OMV had been buying Soviet and Russian gas since 1968, and events indicated that the Austrian company was looking for ways to completely withdraw from Russian gas purchases despite its contracts with Gazprom running until 2040, four of the five sources close to the companies said. operations of Gazprom and OMV.

Last week’s halt in supplies gives OMV an opportunity to argue that Gazprom violated contracts, one of the five sources said.

Gazprom declined to comment on its future relationship with OMV. An OMV spokeswoman said Gazprom deliveries had been interrupted and she did not expect the situation to change.

OMV’s gas seizure and non-payment for Russian gas deliveries in October have not been previously reported.

A LONG-LASTING INFLUENCE

The abrupt end of relations between Gazprom and OMV has surprised many gas market participants and is a major blow to Gazprom’s long-standing economic and political influence in Central Europe.

Austria was one of Gazprom’s most loyal customers, remaining almost entirely dependent on Russian gas even as other EU members turned to imports from Norway, the United States and the Qatar in 2022.