OMV Terminates Long-Term Russian Gas Supply Agreement

Austrian energy company OMV has announced the immediate termination of its long-term natural gas supply contract with Russia’s Gazprom Export, citing multiple breaches of contractual obligations. The decision comes after Gazprom halted gas deliveries to OMV in November 2024, ending a supply relationship that was established in 2006 and was originally set to continue until 2040.

The termination follows OMV’s successful arbitration case against Gazprom, where the Austrian company plans to recover 230 million euros ($241 million) in damages by withholding payments on Gazprom’s invoices. 

Prior to the supply cut-off, OMV had been receiving approximately 7,400 MWh per hour at the Austrian-Slovakian border, equivalent to about 5 TWh monthly, with the contract generating single-digit million euros in margin potential annually.

Austrian Chancellor Karl Nehammer supported the decision on social media, stating that Austria “will not be blackmailed by Russia” while asserting that the country’s energy supply remains secure. The Austrian state maintains a 31.5% ownership stake in OMV.

Alfred Stern, Chairman of the Executive Board and CEO of OMV, emphasized that the company has successfully diversified its gas supply sources over the past three years. 

“OMV is very well positioned to draw on our diversified portfolio of alternative gas sources, safeguarding supply security for our customers,” he said in a statement. 

The company’s current portfolio includes its own gas production in Norway and Austria, third-party producers, and long-term LNG contracts. With storage facilities in Austria currently at 85% capacity, OMV maintains it can fulfill all customer contracts through alternative sources.

The development highlights the continuing shift in European energy dynamics since Russia’s 2022 invasion of Ukraine, after which Gazprom lost most of its European customers. 

OMV had been among the few remaining major buyers of Russian pipeline gas in Europe. While Russian gas continues to flow into Austria through Ukraine and Slovakia, albeit at reduced volumes, the termination of this contract represents another significant break in Russian-European energy ties.

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