Yahoo Finance Russian Gas Supply to Austria at Risk From Gazprom Court Case
(Bloomberg) -- Austria’s reliance on Russian natural gas is being tested, after OMV AG warned traders that European courts could interrupt its payments to Gazprom PJSC.
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A failure to pay the Kremlin-controlled gas giant on time would likely interrupt supplies, OMV said late Tuesday in a so-called urgent market message. Gazprom has covered more than 80% of Austrian imports over the last seven months under a long-term contract running until 2040.
The warning stems from a “foreign court decision obtained by a major European energy company,” OMV wrote in a statement. Should Austrian courts enforce the decision, potentially disrupting OMV payments, it’s “likely that Gazprom Export will halt supplying gas,” it said.
OMV said its doesn’t know whether or when such an enforcement might happen.
An interruption to Russian supplies could lead to a “short-term” increase in prices, Austrian regulator E-Control said Wednesday in a statement. However, adequate alternatives and high storage levels mean the country should have adequate supply into 2026.
E-Control and an OMV spokesman declined to identify the company or court case that triggered the warning. The Ministry of Energy didn’t return requests for comment.
Former Gazprom customers have filed claims against the Russian company, including in Finland, Germany, Italy and the Czech Republic. On Tuesday, Bulgaria announced it’s pursuing €400 million ($434 million) compensation.
The new OMV warning was issued as Austria reviews its contract with Gazprom. Energy Minister Leonore Gewessler has sought to accelerate the country’s pivot away from Russian supplies ahead of national elections later this year.
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For more than half a century, Austrian households and industries have been locked into agreements first signed with the Soviet Union. Fuel shipped through pipelines from Russia have historically tended to be cheaper than liquefied natural gas and those long-term Gazprom contracts gave businesses certainty about their energy costs.
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