Reuters reported that Austria's OMV company said on December 11 that it had terminated a long-term gas purchase contract with Gazprom after the Russian company stopped deliveries last month amid rising political tensions related to the conflict in Ukraine.
The decision marks the formal end of the 50-year contract, which was suspended when Gazprom stopped supplying gas to OMV. The move comes after OMV won an arbitration case over another contract and said it would cover the 230 million euro ($241 million) loss by not paying bills under the main contract with Gazprom.
"OMV today announces the termination of the long-term gas supply contract with Gazprom Export, citing serious breaches of several terms of the contract by Gazprom Export. This termination is effective immediately," OMV said in a statement, referring to Gazprom's suspension of supplies.
The contract was originally scheduled to last until 2040.
OMV was one of the few major European customers to continue buying gas from Gazprom after most countries cut gas ties with Russia since the Ukraine conflict broke out in 2022. Before the conflict, Russia was Europe's largest gas supplier.
Despite the termination of the contract between OMV and Gazprom, Russian gas continues to flow into Austria via pipelines through Ukraine and Slovakia, but in significantly reduced volumes. This has sparked criticism of Austria's dependence on Russian gas, despite Austria having prepared contingency plans and storing large amounts of gas to ensure supplies.
Austrian Chancellor Karl Nehammer asserted on social network X (formerly Twitter): "Gazprom did not comply with the contract, and that is why OMV terminated the contract immediately."
"Our energy supply is secure because we are well prepared. Austria will not be intimidated by Russia using gas as a weapon," he stressed.
The termination of the contract is not only an economic decision but also has major political implications. OMV, 31.5% owned by the Austrian government, has faced pressure both at home and abroad to reduce its dependence on Russian energy supplies.
While this decision demonstrates Austria's tough stance against Russia's alleged "energy weaponization" moves, it also poses many challenges in maintaining energy security in the context of the approaching winter.
The situation further highlights Russia's role in global energy supplies, as well as efforts by European countries to reduce their dependence on Russia by switching to other sources of supply, including liquefied natural gas (LNG) from the United States and other countries.
