OMV’s contracts with Gazprom include a “take or pay” clause which stipulates that it must pay for the gas supplied even if it does not take it.

According to a second source close to Gazprom, Austria’s large gas storage facilities have made it a Gazprom stronghold in Central Europe over the past two decades. The source added that Austria saved billions thanks to cheap Russian gas after the start of the war in Ukraine.

Austria was receiving Russian gas at between $300 and $400 per 1,000 cubic meters when spot prices were trading above $1,000 per 1,000 cubic meters at the height of Russian supply cuts to Europe in 2022, indicated the two sources close to Gazprom.

OMV declined to comment on pricing. OMV CEO Alfred Stern said Gazprom’s prices were aligned with market prices.

Even though Gazprom cut off supplies to OMV, Austria continued to receive Russian gas via Slovakia, according to a Reuters study of regional gas flows.

Gazprom has sold more gas to Slovak company SPP since it stopped sales to OMV. SPP then resold gas to Austrian buyers, three of the five sources said.

Resales have not been previously reported. Gazprom and SPP declined to comment. OMV declined to say whether it was indirectly purchasing gas from Gazprom under the deal.

REDUCE THE CHALLENGE

OMV’s Stern was considering reducing his reliance on Russian gas after taking office in 2021, one of the five sources said.

In addition to the action against irregular supplies to Germany, OMV has launched several other arbitration proceedings against Gazprom, having written down 2.46 billion euros of Russian investments after Moscow seized its stakes in the gas field Siberian by Yuzhno Russkoye.

Austria, whose government owns 31.5% of OMV, is politically neutral but supports sanctions against Russia.

His chancellor Karl Nehammer was the first Western leader to visit Russian President Vladimir Putin after the invasion. Last year, his Foreign Minister Alexander Schallenberg said a complete decoupling from Russia was illusory.

However, relations have become strained recently. Austrian bank Raiffeisen, Russia’s largest Western bank, has had its local Russian subsidiary frozen by a Russian court in a separate dispute with tycoon Oleg Deripaska. Raiffeisen has around 5 billion euros blocked in Russia.

The day Gazprom cut off gas supplies to OMV, Nehammer accused Moscow of using energy as a weapon.

Nehammer has remained at the helm of a caretaker government since September’s general election won by the Russia-friendly Freedom Party (FPO). But with around 29% of the vote, the FPÖ would have needed a coalition partner to obtain a majority in Parliament and form a government.

Since no potential coalition partners came forward, Nehammer was tasked with forming a government and is negotiating with other parties to form a new coalition that would exclude the FPÖ.

Austrian Energy Minister Leonore Gewessler said it was up to OMV to decide whether or not to withdraw from contracts with Gazprom.

“My task, as well as that of the federal government, is to create the framework conditions to make this exit possible,” she said.

($1 = 0.9608 euros)

(Reporting by Jan Lopatka and Jason Hovet in Prague, Krisztina Than in Budapest and John O’Donnell in Frankfurt; writing by Dmitry Zhdannikov; editing by Simon Webb and Jan Harvey)