Focus on gas products
Worldwide demand for gas is anticipated to continue to grow beyond 2030. The phase-out of coal and nuclear power in the electricity sector will increase demand for safer and more climate-friendly gas in the European market. Therefore, OMV has been consistently increasing the share of natural gas in production and aims for gas to account for more than 65% of the production portfolio and for increased natural gas sales in Europe. Through this emphasis on natural gas, the fossil fuel with the lowest carbon intensity, OMV can reduce the carbon intensity of our energy system today and enhance the viability of operations in the long term.
Production split
In 2019, gas production accounted for 57% (2018: 57%) of total Upstream production. Gas production amounted to 101.8 mn boe in 2019 (2018: 89.5 mn boe).
In 2019, the Larak gas development project came on stream in Malaysia, and the Nawara gas development and pipeline project in Tunisia is scheduled to start production in 2020. The divestment of the Maari field shifts OMV in New Zealand to a gas-only producer and reduces emissions from Upstream operations by 280,000 t CO2 equivalent per year. This reinforces OMV’s strategy to place the focus on natural gas production rather than oil.
Total gas sales in Downstream Gas amounted to 136.7 TWh (2018: 113.8 TWh). OMV increased its market share in Germany to 4%, with plans to achieve 10% by 2025. We also started gas sales activities in the Netherlands and reached a market share of 2% in 2019.
OMV actively advocates for the increased use of gas in power generation and mobility in the transition phase. Replacing lignite-fired power plants with gas reduces CO2 emissions by 50%. For example, OMV Petrom’s combined-cycle gas-fired power plant in Romania produced 1.26 mn t of GHG emissions emissions in 2019. If it were lignite fired, it would have produced 2.5 mn t of GHG emissions instead.
Liquefied Natural Gas (LNG) is currently the only available alternative fuel for long-distance trucks, buses, and ships. Natural gas vehicles (NGVs) provide a cleaner mobility alternative with up to 23% less CO2, 75% less nitrogen oxide, and 98% fewer particulate emissions.
Gas (natural gas, biomethane, hydrogen, and synthetic methane) supports the integration of renewable energies. That is why OMV is actively exploring options with partners for taking the key power-to-gas technology to an industrial scale. With power-to-gas, wind and solar energy can be stored as hydrogen, and sector coupling becomes a reality. Separate gas and electrical grids have the potential to become one energy cloud with fluid transitions.
Since natural gas is a clean, safe, and readily available alternative fuel for transportation, OMV is assessing the options for intensifying its gas-mobility activities (for more details, see Focus on future mobility).
Emission savings with natural gas (CNG and LNG) vs. gasoline and diesel (Euro 6)
Sources: thinkstep, EMPA, Volkswagen, Equilibre
In 2019, we began offering our customers the option of procuring climate-neutral gas. Through our cooperation with Climate Partner, we are able to offer our customers a carbon-offsetting service for emissions generated during the consumption of gas. In 2019, we were able to offset approximately 30,000 t of CO2 thanks to climate-neutral gas contracts for upcoming delivery years. We have defined a rigorous set of criteria and standards for the selection of climate protection projects to ensure optimal emissions offsetting verification. For instance, the technologies we selected for climate protection in our projects are wind power and forest protection. Climate protection projects are verified according to the internationally recognized standards for voluntary emissions reduction, the Verified Carbon Standard (VCS) and the Gold Standard (GS).
OMV operates gas infrastructure (pipeline and storages) in Austria and Germany which are essential for ensuring the security of supply in our markets. The gas infrastructure will also play an essential role in cost-effectively making the shift toward carbon-neutral gas solutions (synthetic gas, biomethane, and hydrogen) and an integrated energy system.
Natural gas is an important alternative as a lower-carbon fuel for industry. However, industrial users also value the gas provided by OMV for the security of supply. For example, NÖM, a large Austrian producer of dairy products, uses gas supplied by OMV for generating steam used for heating up fresh milk in the pasteurization process. Gas provides a great lower-CO2 alternative to coal- or oil-heated steam boilers. With a processing capacity of 1.2 mn liters of milk a day (45% of which ends up in products that are exported), NÖM needs an uninterrupted supply of gas. NÖM is confident that it can rely on OMV to supply its gas.
In total, OMV invested EUR 295 mn in the development of gas assets in 2019 (2018: EUR 198 mn).