Austria is prepared to weather the country’s upcoming winter without imports of pipeline gas from Russia, according to Austrian oil and gas producer OMV.
Speaking at a conference call on company’s third quarter results on Friday, OMV chief executive Alfred Stern said the company has worked hard to secure alternative gas supplies for the country, where an estimated 85% of its total gas consumption in 2021 was supplied by imports from Russian gas giant Gazprom.
Stern said that in recent months OMV has established routes for deliveries of equity gas from Norway and supplies of liquefied natural gas via Rotterdam’s Gate regasification terminal in the Netherlands.
Gas purchase contracts have also been signed with suppliers in Norway and Italy, he said.
Stern also singled out the securing of 40 terawatt hours of additional gas pipeline capacity from Europe to Austria for the current gas year, which started on 1 October.
OMV-controlled storage facilities in Austria are now 100% full and the company can fully supply customers in the country with non-Russian gas this year if required, he said.
Stern implied that, after gas prices almost doubling this year, the cost of OMV’s Russian volumes have almost level with alternative supplies.
Despite the looming threat of Gazprom halting transit gas deliveries across war-torn Ukraine to Slovakia and Austria, Stern said that the share of Russian gas reaching Austria’s hub in Baumgarten has recently risen to 65% against the previous level of 30%.
An unseasonally warm October has delayed the start of the winter heating season in Europe, pushing the spot price of gas on the continent to about €90 per megawatt hour earlier this week.
However, on Friday, spot gas prices increased to about €110 per MWh on Europe’s largest trading hub, the Dutch TTF.
Stern said the recent drop in the gas price is just “a temporary relief that OMV sees in the market”, pointing out that the average price for contracts for gas supplies in the first quarter of 2023 remains high, reflecting expectations that Europe may still experience shortages this winter.
Strong performance
According to OMV, the company was able to continue strong operational and financial performance in the third quarter of this year, primarily driven by high oil and gas prices.
This was despite hydrocarbon sales decreasing by 80,000 barrels of oil equivalent per day following the removal of Russian assets from consolidated results.
However, the loss of Russian volumes were partly compensated by higher sales from assets in the United Arab Emirates and Norway.
Negative results were also recorded in OMV’s gas marketing business in Western Europe, primarily due to gas supply curtailments by Gazprom, it said.
As well as the route via Ukraine and Slovakia, OMV also received gas via the Nord Stream 1 pipeline running across the Baltic Sea from Russia to Germany.
However, Nord Steam 1 deliveries fell this summer and completely stopped in the beginning of September, before the pipeline was damaged by explosions at the end of the month.
Despite the toll from its Russian exit, OMV said its revenues increased to €17.6 billion ($17.6 billion) in the third quarter this year against €8.8 billion in the same period last year, and against €16 billion in the second quarter of 2022.
However, a strong increase in income and profit taxes in the third quarter led to its net profit slipping to €833 million against €1.9 billion in the second quarter, according to the company’s data supplement report.
On a year-to-year comparison, however, OMV’s bottom line for the third quarter of 2022 tripled against the net income of €279 million for the same period last year.
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