Gas Marketing & Power

Gas Marketing Western Europe

OMV markets and trades natural gas in eight European countries. In 2023, natural gas sales volumes amounted to 85 TWh (2022: 111.2 TWh). The foundation of the natural gas sales business is a diverse supply portfolio, which consists of equity gas from Austria and Norway (amounting to 30.7 TWh in 2023) and a variety of international suppliers. In addition to mid- and long-term activities, short-term activities at Europe’s main international trading hubs and the EU joint natural gas purchasing platform complement OMV’s supply portfolio.

Gas supply, marketing, and trading

OMV’s Gas Marketing & Trading sales activities are focused on a diverse customer portfolio in the large-scale industry and municipality segments in Austria, Germany, Hungary, the Netherlands, and Belgium. Italy, Slovenia, and France are covered by opportunistic origination activities. The LNG business is an essential pillar of our business. OMV fully utilized its allotted capacity at the Gate regasification terminal in the Netherlands. Two long-term LNG supply contracts starting from 2026 and 2029 until 2036 have been concluded and refer to non-Russian natural gas only. This makes the LNG business a very important building block for OMV’s diversification of its natural gas supply portfolio, thereby enhancing supply security.

Even in 2023, the European natural gas market was still impacted by the energy market crisis stemming from the war in Ukraine, with very volatile natural gas prices and unpredictable supply curtailments from Russia. This situation is expected to continue.

The Gas Task Force, established in 2022 to minimize the adverse effects of the war in Ukraine, is making good progress on securing a continuous and diversified supply stream. This involves regular reporting of the security of supply status regarding OMV’s portfolio in terms of the overall natural gas supply situation, storage filling levels, and a continuous definition and adjustment of hedging strategies that mitigate the inherent price risk of natural gas supply disruptions. Natural gas supply diversification strategies were defined and executed accordingly, and OMV again successfully secured additional natural gas transportation capacities. Furthermore, OMV was able to fully utilize the capacity of its storage facilities. These measures succeeded in securing OMV’s portfolio and in increasing the resilience of the supply situation for the coming years. This will mitigate the impact of erratic Russian natural gas supply on OMV’s natural gas sales portfolio in Germany and Austria.

Gas logistics

OMV operates natural gas storage facilities in Austria and Germany with a capacity of 30 TWh. Additionally, OMV holds a 65% stake in the Central European Gas Hub (CEGH), the leading natural gas trading hub in Central and Eastern Europe.

Due to the previous mild winter in 2022, European storage system operators were able to start the new storage year in April 2023 with a relatively high storage level of 56% (April 1, 2022: 27%). A significant number of new international and national legal requirements and a consistently high degree of price volatility dominated the energy market. In this challenging environment, OMV Gas Storage still managed to win several new customers in 2023, expand the design capacity, and fill the OMV storage facilities to a maximum level of 104.5% in Austria and 99% in Germany.

At the Central European Gas Hub, 575.1 TWh of natural gas was nominated at the Virtual Trading Point (VTP) in 2023. This volume corresponds to approximately 7 times Austria’s annual natural gas consumption.

Gas & Power Eastern Europe

In Q1/23, Energy integrated the Gas Marketing East business from OMV Petrom. Synergies depend on both external and internal factors, and the aim is always to deliver the best results. Gas & Power Eastern Europe is developing operations in six countries, while also having market access to other countries close to Romania.

Following an unprecedented year on the energy market in 2022, with record high prices for both natural gas and power, market prices substantially decreased in 2023, accompanied by continued volatility. In Romania, the same trend with significantly lower prices compared to 2022 did not, however, translate into demand recovery. Consumption in Romania of natural gas and power across the full year was lower compared to the previous year, with industrial users’ offtake continuing to decline throughout the year and only some uplift at the end.

Regulations introduced by Romanian authorities in 2022 were in place during 2023 as well, meaning the natural gas and power markets continued to be highly regulated.

The Gas & Power Eastern Europe natural gas sales volumes to third parties reached 37.9 TWh in 2023, 6% higher compared to 35.8 TWh in 2022, making it a very strong performance. To complement equity natural gas supply, OMV Petrom sourced valuable volumes from third parties, thus successfully covering all its diverse sales channels.

Opportunities in neighboring countries are continuously scanned. In 2023, the first natural gas purchase contract with Botaş (Türkiye) was concluded, which is valid until March 2025. A memorandum of understanding to expand collaboration in the field of liquified natural gas (LNG) in Southeast Europe was also signed, thus contributing to security of supply for our own portfolio and that of the country in question.

On the power side, the net electrical output of the Brazi power plant decreased to 4.2 TWh, –17% compared to 2022, which was a record year for production. The Brazi power plant covered around 7% of the national power generation mix, with the contribution impacted by a planned outage of the entire capacity from March to the beginning of July 2023. It was the largest planned outage since the start of operations in 2012, and included the first major inspection of the steam turbine. After the outage, the power plant delivered exceptional output, with record high production levels.

In addition, activities on neighboring power markets have been expanded, making a significant contribution to the strong power result and continuing to strengthen our regional footprint.

Significant progress was achieved on renewable projects, including the partnership with Complexul Energetic Oltenia for four PV projects with a total capacity of around 450 MW, for which the financing contracts were signed with the Ministry of Energy, and the purchase of PV project rights with a future total capacity of around 710 MW. This builds momentum in achieving our strategic targets to transition to low and zero carbon.

In January 2024, OMV Petrom announced the purchase of a 50% stake in Electrocentrale Borzesti from RNV Infrastructure, which holds around 1 GW of renewable energy projects (950 MW wind and 50 MW solar). The projects will be developed further, built, and run in collaboration with RNV Infrastructure.

Additionally, OMV Petrom and Renovatio intend to invest roughly EUR 1.3 bn, including project financing, in Romanian renewable energy by 2027. OMV Petrom’s contribution for the acquisition and development of these projects is estimated to be up to EUR 350 mn. The closing of the transactions is expected to take place in the first half of 2024, after fulfilment of certain conditions.