On May 15, in Vienna, Gazprom, Gazexport and OMV AG entered into a new long-term Agreement on natural gas supply to West Europe by the West Austria Gasleitung (WAG) gas pipeline.

Valid over 20 years (from 2007 through 2027), the Agreement stipulates some 4.4 bcm/y of Russian gas to be delivered from the Slovak border (Baumgartner vicinity) via Austria to the German border (Burghausen vicinity). For these purposes, WAG will be substantially expanded through some EUR 260 mln in investments by OMV.

To be initiated this year already and finalized before 2011, the three-stage process will make it possible to increase the pipeline capacity from 7 to 11 bcm/y.

“This Agreement sealing is another crucial achievement of the 40-year cooperation between OMV and Gazprom. We’re making a huge contribution into long-tem gas supply of Europe. This move will also emphasize the significance of the OMV-owned Baumgartner gas-fired power plant as a major European gas hub. At present, OMV is transmitting roughly 50 bcm of gas by its Austrian pipeline network, including some 43 bcm annually transited to West, East and South Europe, which is about one third of the total Russian gas exports to Europe,” - Wolfgang Ruttenstorfer, OMV AG’s Director General was quoted as saying.

“The long-lasting and mutually beneficial cooperation with our Austrian counterparts is a major business of Gazprom’s export strategy. Another long-term agreement with OMV that will increasingly bolster the reliability of Russian gas supplies to Europe is strong proof to it,” – said Alexander Medvedev, Deputy Chairman of Gazprom’s Management Committee and Gazexport’s Director General.

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OMV AG is the first Western company to have sealed in 1968 a long-term contract on natural gas procurement with the USSR. As of 1 January 2005, a total of over 138 bcm of Russian gas had been delivered to Austria. In 2004, Austria transited some 31 bcm of Russian gas.

The largest petroleum firm in Central Europe, the OMV Concern is engaged in the processing & marketing and extraction & manufacture sectors through 13 and 18 (five continents) locations worldwide. OMV counts on underground gas storage facilities and a 2,000-km-long pipeline network being a key component of the European gas transmission system and annually channeling 43 bcm to Austria, Germany, Italy, France, Slovenia, Croatia and Hungary.

DIVISION OF RELATIONS WITH MASS MEDIA