The Austrian energy company’s decision to stop paying for gas from Gazprom sets a precedent for other companies to follow as Europe seeks to reduce its dependence on Russian gas. Gazprom responded by cutting off gas supplies to Austria’s OMV, highlighting the serious consequences of the move, according to Bloomberg.
Lawyers say this sets a precedent for other companies to take similar action as more pending cases are transferred to international courts.
Companies from Italy's Eni to Germany's RWE say they are owed compensation for the cost of replacing supplies when Gazprom stops delivering gas in 2022.
Agnieszka Ason, an energy lawyer and researcher at the Oxford Institute for Energy Studies, said several cases were pending and more were expected in the coming months.
“If more damages are awarded to European importers and at least some of the judgments can be enforced, it will put great pressure on Gazprom's financial situation,” she said.
Russian gas flows to Europe are likely to be further cut amid US sanctions on Gazprombank - the Russian bank used by European companies to pay for gas - and the uncertain future of gas transit through Ukraine when the deal ends at the end of this year.
Companies demanding compensation from Gazprom are unlikely to receive cash payments, according to Bloomberg.
Meanwhile, OMV’s suspension of payments for gas received from Russia via Ukraine led Gazprom to cut supplies almost immediately. From this case, other companies decided not to pay, needing to ensure that they had alternative supplies to survive without Gazprom.
For the Russian gas company, cutting off gas to one customer means losing another foothold in Europe.
Gas is one of the only valuable assets Gazprom has left in Europe. The company's international assets shrank after the nationalization of Gazprom Germania at the height of the energy crisis.
Uniper - one of Gazprom's former partners hit hardest by the supply drop - has won more than 13 billion euros in damages for Russian gas not being delivered since mid-2022. The international arbitration ruling allows the German company to terminate its supply contracts with Russia.
The former pipeline operator NET4GAS received monthly payments to transport gas through the Czech Republic. The company won an arbitration case last year seeking damages after Gazprom stopped paying.
Currently, the European market is preparing for the possibility of Russia stopping gas supply after the transit agreement between Russia and Ukraine officially expires at the end of this year, marking an important milestone in the context of Europe's efforts to escape its dependence on Russian gas.
Among the pending high-level arbitration cases is Eni’s lawsuit against Gazprom over reduced gas supplies in 2022. Although the Italian company no longer buys gas directly from Gazprom, any ruling could have repercussions across the European gas market, as in the cases of Uniper and OMV.
