Austria will continue to rely on Russian gas as its primary source of fuel for the foreseeable future, according to Chancellor Karl Nehammer. Nehammer acknowledged that while the Russian gas may not be cheaper than other options, the current pipeline system in Europe has allowed Russian fuel to dominate the energy markets in Eastern and Central Europe for many years.
In an interview with Austria’s broadcaster ORF, Nehammer stated that Austria is taking measures to mitigate potential disruptions in gas transit through Ukraine at the end of 2024. The government is also working on diversifying its suppliers, but the switch to alternative sources is unlikely to happen in the short term. The immediate priority for Vienna is to ensure a stable energy supply for the upcoming winter, without having to choose between supplying energy to households or industries.
Nehammer pointed out that OMV, Austria’s largest gas provider, has contracts with Gazprom, Russia’s state-owned gas company, until 2040. Therefore, the country cannot simply terminate these contracts immediately. The chancellor assured viewers that the government has been preparing for adverse scenarios and has built up a strategic reserve, which includes a significant amount of non-Russian gas. Austria has also found new ways to source fuel, allowing it to become more independent from Gazprom.
To further reduce its reliance on Russian gas, Austria is expanding its pipeline connections with neighboring Germany and Italy. The country is actively seeking alternative gas sources and has identified Croatia as another potential partner in this regard.
OMV CEO Alfred Stern had previously stated that the company would continue to purchase Russian gas as long as it was legal under EU regulations. He warned that placing restrictions on such imports would lead to higher gas prices. Currently, OMV covers around 30% of Austria’s gas needs.
Stern emphasized that abandoning Russian gas is not feasible for Austria as it would have severe consequences for the country’s economy and energy security. Last year, Russia introduced a new settlement mechanism, which required “unfriendly countries” to pay for gas in rubles. Austria was among the first to comply with this mechanism.
In conclusion, while Austria aims to diversify its gas suppliers and reduce its reliance on Russia, the current pipeline system and existing contracts with Gazprom mean that Russian gas will continue to be the primary source of fuel. The government is taking steps to prepare for potential disruptions and is expanding its pipeline connections with neighboring countries. However, a complete switch to alternative sources is not expected in the short term.