On January 25, 2008 Wolfgang Ruttenstorfer, CEO of OMV, and Alexander Medvedev, Deputy Chairman of OAO "Gazprom" and Chairman of Gazprom export Ltd., signed a Cooperation Agreement. The two companies agreed on a contractual framework to expand their cooperation: Gazprom will take a 50% interest in the Central European Gas Hub (trading hub) and the parties will carry out joint storage projects in Austria and neighbouring countries. The Central European Gas Hub is to become continental Europe's most important trading platform. This agreement is based on the Memorandum of Understanding the companies signed in May 2007. OMV's CEO Wolfgang Ruttenstorfer stated: "This agreement is a further milestone in the cooperation between OMV and Gazprom, dating back nearly 40 years. With this agreement we have again made an important step in securing Europe security of supply in the long-term."

In 1968, OMV became the first Western European company to conclude a gas supply agreement with the former Soviet Union. This partnership, dating back nearly 40 years, was greatly strengthened in September 2006 with the extension of the gas supply agreements to 2027, with an overall volume of 150 bcm, and was deepened with the Cooperation Agreement on hand.

The agreement stipulates that Gazprom shall take a 50% interest in the Central European Gas Hub, a subsidiary of OMV Gas International. The Central European Gas Hub already is one of the three biggest trading hubs in continental Europe. The aim is to expand and further develop it into the number one trading hub in continental Europe by setting up an international marketplace. As such, the Central European Gas Hub will substantially contribute in increasing the liquidity of continental Europe's natural gas market. In 2007 the trading volumes already could be more than doubled compared to 2006, amounting on average to approximately 1.5 bcm per month. Building on the basis of the 60 customers currently registered, trading volumes are to be steadily increased in future. The partnership with Gazprom will further increase security of supply via the Baumgarten Hub and at the same time safeguard the liquidity for short-term trading activities.

"This agreement is further evidence for the realisation of Gazprom's efficient export policy. We are once again demonstrating the tremendous contribution Gazprom is making in securing Europe's natural gas supply," emphasises Alexander Medvedev.

The agreement also includes joint storage projects, which aim at additionally strengthening the position of the Central European Gas Hub and providing the possibility of increasing its service offering even further. In the future, this will both strengthen security of supply and allow the hub to meet its clients' requirements for flexibility. The joint storage projects aim at providing services for both the region surrounding the Baumgarten hub and neighbouring countries. Possible projects will be evaluated in upcoming feasibility studies.

This cooperation also enhances the importance of the OMV gas compressor station Baumgarten, one of Europe's most important gas import stations for Russian gas, wholly owned by OMV Gas GmbH, in its role as a physical natural gas hub for Central Europe. Approximately one third of all Russian gas exports to Western Europe are already transported via this important platform.

Tags: Gazprom, OMV