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Alfred Stern: Neptun Deep will make a significant contribution to Europe’s security of supply

11 July 2023

OMV CEO Alfred Stern says the Austrian group will continue to buy natural gas from Russia but at the same time dismissed criticism that OMV is doing nothing to reduce its dependence on Russian gas by pointing to the Neptun Deep project.

In an interview with the Financial Times, Alfred Stern said that 18 months after the Russian invasion of Ukraine, the OMV group has no plans to end the long-term supply contract agreed with the Russian group Gazprom, which it signed in 2018.

“As long as Gazprom supplies … we will continue to take these quantities from Gazprom,” Stern said. Asked whether EU sanctions on Russian gas would be welcome or provide respite for OMV, Stern said the matter “is up to the decision-makers”, but warned that “eliminating certain sources will push prices up”. “There is an obligation that we have as an industrial company to ensure that we use these sources, as long as they are acceptable from a legal point of view,” added the director of OMV, quoted by Agerpres.

At the same time, Alfred Stern rejected criticism that OMV is not doing anything to reduce its dependence on Russian gas. Stern noted that OMV has concluded contracts to secure the necessary capacities to transport the gas it needs and has also secured its gas supply from Norway as well as through the liquefied gas terminals in the Netherlands.

“All of this has given us access to non-Russian gas that is more than enough to cover our obligations to customers,” Stern said, noting the uncertain nature of Russian supplies, which have fluctuated widely over the past year, fluctuating between 20% and 70% of OMV’s monthly gas imports.

Stern also mentioned that OMV has just approved two billion euro investments for the commissioning of the Neptun Deep gas field in the Black Sea by 2027, in a 50-50 joint venture with Romania’s Romgaz, a project that will bring 100 billion cubic meters of natural gas to the European market. “This will make Romania the largest producer of natural gas in the EU, and OMV one of the largest gas producers in Europe. I think it is a significant contribution to the security of European supply,” said Stern.

Overall, Alfred Stern believes that OMV has done an “exceptionally good job” in managing the current energy crisis, even though he admits that the “take or pay” clause in the Gazprom contract allows Russia to have the biggest say in deciding how much natural gas buys OMV from the Russian group. However, Stern refused to criticize the contract with Gazprom, which he characterized as a “standard” one for the gas market. “There is nothing strange about this contract,” said Alfred Stern.

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