The head of Austria's OMV said July 28 he expected to see the Nord Stream 2 gas pipeline commissioned "in the second half" of this year, reiterating his long-held view that the project would bring necessary import route diversification.

The 55 Bcm/year Nord Stream 2 link from Russia to Germany is almost complete, with one string finished in June and the other expected to be completed by the end of August.

An agreement reached this month between Germany and the US gave the project a boost, allowing for the pipeline to become operational.

"I welcome the agreement between the US and Germany because it paves the way for the final completion and commissioning of the pipeline," OMV CEO Rainer Seele said during a second-quarter earnings call.

"It is a source of personal pleasure that the pipeline will be commissioned this year," Seele said.

"From the very beginning I have invested passion into the project and have been very committed -- it is an important infrastructure project that will now come on stream," he said.

"Natural gas and its transport network will play a decisive role in the energy transition."

Seele added that Nord Stream 2 would bring more diversification of transport routes for Russian gas to Austria, bringing "higher security of supply and safeguards for our customers."

In the past, OMV's import contracts with Russia's Gazprom were for supply via Ukraine. "This dependence no longer exists," he said.

OMV and four other European energy companies -- Anglo-Dutch Shell, France's Engie and Germany's Uniper and Wintershall Dea -- each committed Eur950 million ($1.15 billion) to the Eur9.5 billion project, adding up to 50% of the expected total cost.

OMV CFO Reinhard Florey said July 28 the company had invested a "little more" than Eur800 million in Nord Stream 2, just short of its initial commitment.

"We only played the role of financier, there was no equity investment," Florey said.

Gas prices

In its Q2 earnings report, OMV said it expected its average realized gas price in 2021 to exceed Eur12/MWh. This is an increase from previous guidance of a realized price of more than Eur11/MWh.

OMV's realized gas price in Q2 was Eur12.28/MWh, up by almost Eur2/MWh from Q1 and building on the recovery in prices since Q4 last year.

However, the improved realized price was still well below the average wholesale price for the quarter following a rally in spot prices, with the CEGH average at Eur24.83/MWh.

OMV has said previously there were several reasons for the realized price being lower than the CEGH average, including having fixed gas prices in producing countries outside Europe and some contracts having a time lag effect.

European gas prices have risen over the past year, moving from close to record lows to near-record highs.

According to S&P Global Platts price assessments, the average TTF day-ahead price in Q2 2021 was Eur24.80/MWh, up from Eur5.33/MWh over the same period in 2020.

Prices have moved even higher in Q3, with the TTF day-ahead price assessed at Eur37.73/MWh on July 27.

Total OMV gas sales in Q2 were 44.43 TWh, up 37% year on year.

Gas sales volumes in 2021 are projected to be above those of 2020, OMV said. Last year's total was 164 TWh.

Seele, who is set to step down as CEO on Sept. 1, said he saw "cause for optimism" in the second of half of 2021 and that signs of an economic upswing were "clear."