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Austria's OMV agrees to buy additional 1 Bcm/year of Russian gas

London — Austria's OMV has agreed to buy an additional 1 Bcm/year of Russian gas under its long-term contract with Gazprom, the company said Monday, as Austrian appetite for gas from Russia continues to strengthen.

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Under an amendment to the companies' existing contract -- which earlier this year was extended by 12 years to 2040 -- OMV has agreed to the further 1 Bcm/year in offtake in addition to the existing 5 Bcm/year arrangement.

Total Russian gas exports to Austria have risen strongly in recent years, with supplies last year reaching 9.1 Bcm.

Following a meeting in St Petersburg between Gazprom CEO Alexei Miller and his OMV counterpart Rainer Seele, the new arrangement was agreed.

"By increasing gas supplies to Baumgarten, we are making an additional contribution to security of supply in Austria ?- as well as to other European countries," Seele said.

An OMV spokesman said the amended contract would come into force on January 1, 2019 and run till the end of 2040.

HIGH DEMAND

Miller said that over the past few years, Gazprom has been setting "new records" for exports to Austria.

He said that in the first 10 months of 2018 alone, gas supplies to the country have grown by a third compared with the same period of 2017, reaching 8.8 Bcm.

"The signing of a document on additional exports beyond the contractual amounts serves as yet further proof of the high demand for Russian gas on the part of our European consumers," Miller said.

Seele said European demand for gas would continue to rise "primarily as the result of gas-fired power plants replacing coal, coupled with the simultaneous decrease in European production."OMV is one of Gazprom's key European partners.

Its move in June to extend to 2040 its long-term contract with Gazprom was a sign of the companies' close relations.

The contract signed in 2006 with OMV subsidiary Econgas -- which was fully consolidated by OMV in 2015 -- had been due to expire in 2028.

OMV is also a partner in the Russian upstream with Gazprom, and is a co-financier of the planned 55 Bcm/year Nord Stream gas pipeline to Germany.

--Stuart Elliott, stuart.elliott@spglobal.com

--Edited by Maurice Geller, maurice.geller@spglobal.com