When OMV’s international gas chief Reinhard Mitschek addressed the Nord Stream 2 conference in Vienna he was quite blunt in his support for the project.
«We want to find business solutions; we have to face business realities,» he said.
«Whether we want to or not, we have to cope with a secure supply of gas, not just for the next 2 or 3 or 4 years, as long as transit arrangements are in place in the Europe-Ukraine corridor, but for decades, to take us up to 2035. So it’s our resolution and obligation how to get a responsible and cost-effective, less expensive, gas supply for our customers in Europe.»
Mitschek – officially styled as senior vice-president OMV Business, with responsibility for international gas business – elaborated on this and other issues in an interview with NGW in Vienna November 22, 2016.
But while he was outspoken on the ability of Russia to ensure gas supply security for Europe – and somewhat dismissive of US LNG performing such a function – he was wary of addressing the issue of how much progress OMV had made in developing closer relations with Russia’s Gazprom.
«NS2 is interesting, attractive and challenging,» Mitschek told NGW. Europe, he argued was likely to see an increasing gap between its domestic production and its consumption, he argued, adding: «If we see the gap of 100bn m./yr or more, it’s interesting to which extent LNG volumes will approach Europe and how the traditional suppliers and producers will react. Will it be price competition or not? What will be the price spread between Henry Hub (in the US) and Europe?»
Mitschek considered the price spread to be a crucial issue. «The first (LNG) vessels from the US went to South America simply because of high prices,» he noted. LNG, Mitschek argues, is a global business and no-one cares about Europe’s security of supply, so if gas prices in Asia are higher than in Europe, then LNG will be directed to these markets.
Mitschek declined to be drawn on the question of his company’s relations with Gazprom. OMV had agreed to become a partner in a joint venture planned by Gazprom to build NS2 but, along with the other western companies involved, withdrew in August after Poland’s competition authority issued a statement of objections.
OMV is currently pursuing a policy of asset swaps with Gazprom through which it would secure a stake of around 25% in two areas of the Achimov formation of Russia’s supergiant Urengoy gasfield; a policy which OMV CEO Rainer Seele also pursued in his previous position as CEO of Germany’s Wintershall.
Asked about the visit to Moscow of OMV board Member Johann Pleininger the previous day to attend the first meeting of the 2 companies’ coordinating committee for scientific and technical cooperation and partnership, Mitschek simply responded: «It’s work in progress. We will disclose topics whenever we achieve results. We can only say there were meetings.»