Russia Leases Kaliningrad LNG Unit to Austria’s OMV

A Russian liquefied natural gas (LNG) unit in the Kaliningrad enclave has been leased by Austrian energy company OMV, Reuters reports.

Russia has decided to lease the Marshal Vasilevskiy floating storage and regasification unit (FSRU), hailed by President Vladimir Putin as a guarantor of energy security to Russia’s enclave, in the absence of immediate threats to its overland gas supplies, the report said.

It is a terminal with storage facilities which can also act as an LNG vessel. The unit had been moored near the Russian exclave of Kaliningrad by Kremlin-controlled Gazprom.

The unit was set up to offset potential disruptions to gas pipeline flows via Belarus to Kaliningrad, which is sandwiched between Poland and Lithuania and cut off from the rest of Russia. However, there is no immediate danger to those flows.

Rainer Seele, the head of the Austrian company, confirmed to Reuters on Thursday that OMV has hired the vessel, after three Gazprom sources said an agreement had been struck.

According to RefinitivEikon data, the vessel has been moored at the port of Rotterdam. “(OMV) have loaded an LNG cargo and are waiting for LNG prices to go up to re-sell it,” a Gazprom source said. Gazprom declined to comment. Russia’s energy ministry had no immediate comment on the deal.

OMV chief executive Seele told Reuters on the sidelines of an economic event in Austria’s Alpbach that the company planned to use the vessel as an offshore storage facility.

He declined to say whether the ship was holding Gazprom’s LNG, nor for how long OMV had leased the vessel. Marshal Vasilevskiy is able to convert liquefied natural gas into gas which can be pumped via pipelines to consumers.

Gazprom has a long relationship with the Austrian company, which is its partner in the Nord Stream 2 gas pipeline. The Russian gas giant has pledged to supply OMV with the equivalent of 1.2 billion cubic meters of natural gas in the form of LNG in 2020.