Downstream Gas operates a fully integrated gas business across the gas value chain from the wellhead to the burner tip. 1 It includes the Group’s power business activities with one gas-fired power plant in Romania.
Supply, marketing and trading
OMV markets and trades natural gas in nine European countries as well as in Turkey. In 2019, natural gas sales volumes amounted to 136.7 TWh (2018: 113.8 TWh), which is an increase of 20%. The foundation for growing gas sales activities is a well-diversified supply portfolio which consists of equity gas and a variety of international suppliers. In addition to mid- and long-term activities, short-term activities at the main international hubs complement OMV’s dynamic supply portfolio.
OMV Gas Marketing & Trading GmbH’s (OMV Gas) sales activities are focused on the large industry and municipality segments. OMV Gas has a local presence in Austria, Germany, Hungary, the Netherlands, and Belgium. External sales in these countries amounted to 87.3 TWh, an increase of 34% compared with 2018. Italy, Slovenia, and France are covered by origination activities. This is a substantial achievement given the challenging market environment. Margins remained under pressure due to the competitive and increasingly volatile European gas market situation. This situation is expected to also continue in the future. In Germany, OMV Gas plans to achieve a market share of 10% by 2025, a target that is well on track. In 2019, sales had reached 40.1 TWh, an increase of 58% over the previous year and a market share of 4%.
In Romania, OMV Petrom gas and power activities achieved a good operational result, reflecting the optimization of products and customer portfolios, which compensated a weaker power business performance triggered by deteriorated market conditions. In the context of a still volatile regulatory framework as well as declining domestic gas demand, the natural gas sales volumes to third parties reached 47.2 TWh in 2019, representing an increase of 21% versus last year and were supported by significant third party supply volumes to complement the lower equity gas production. In Romania, the net electrical output decreased to 3.4 TWh in 2019 (2018: 3.8 TWh), with the Brazi power plant covering approximately 6% of Romania’s electricity production (same percentage as in 2018), while also being an important player on the power balancing market.
In 2019, OMV Gas also substantially improved the capacity utilization of the Gate regasification terminal. Besides operating a growing LNG spot business, OMV Gas has entered into important mid-term LNG deals, under which a number of LNG cargoes will be delivered to Europe. These LNG cargoes will provide an additional source of gas to meet OMV’s ambitious sales growth targets in Northwest Europe, while further enhancing the security of supply for OMV’s geographically diverse supply portfolio. The LNG business supports the strategy of portfolio integration of supply, marketing, and trading business in the West, the East, and Turkey.
OMV runs gas storage facilities in Austria and Germany with a storage capacity of 30 TWh. Additionally, OMV holds a 65% stake in the Central European Gas Hub (CEGH), an important gas trading hub in Central and Eastern Europe. OMV’s subsidiary Gas Connect Austria operates an approximately 900 km long high-pressure natural gas pipeline network in Austria.
At around 575 TWh, actual entry/exit transportation volumes in Eastern Austria (Regelzone Ost) were the highest they have been in the past six years. Particularly the Baumgarten (entry) and Mosonmagyaróvár (exit) interconnection points were utilized at high levels in 2019.
The storage market was characterized by high customer demand and an increased market price level due to higher summer/winter spreads as well as higher volatility. At the European hubs, summer/winter spreads reached levels significantly above previous years. After a relatively high filling level at the end of last winter, Austrian storage facilities were utilized even above design capacity in the fourth quarter due to the high customer demand.
At the Central European Gas Hub, 754 TWh of natural gas were nominated at the Virtual Trading Point (VTP) in 2019, an increase of 14% compared with 2018. This volume corresponds approximately to eight times Austria’s annual gas consumption. On the PEGAS CEGH Gas Exchange Market, 163 TWh were traded in Austria in 2019, an increase of 23% versus last year. Both results are all-time highs in the history of CEGH. The PEGAS CEGH Gas Market was integrated into EEX Gas as of January 2020.
OMV is a financing partner of the Nord Stream 2 project. In 2019, OMV provided funds of EUR 113 mn, bringing OMV’s total current payments under the financing agreements for Nord Stream 2 to EUR 712 mn.
1 OMV’s gas business is operated in strict adherence with the applicable gas unbundling rules.