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‘We don’t need Russian gas’: Will Austria finally ditch Gazprom?

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When Austria was forced to admit in mid-February that Russian gas made up 98% of its recent gas supply  – two years after the Kremlin attacked Ukraine – it triggered a political pile-on. Will Austria be able to rid itself of its dependence?

With parliamentary elections in September looming, government ministers and opposition parties are desperate to cancel the country’s secret gas supply contracts with Gazprom – which force Austria to import gas until 2040.

The Austrian government – composed of the centre-right ÖVP and the Greens – agrees on the need to reduce its dependence on Russia. But it is the Greens’ energy minister, Leonore Gewessler, who is driving the charge in Vienna. 

On Sunday (25 February), she told public broadcaster ORF: “We have to get out of the Russian gas supplies, we have to get out of this susceptibility to blackmail.”

Gewessler has repeatedly stressed that Austria’s continued gas imports help the Kremlin pay for its war on Ukraine, adding a moral obligation, beyond the established economic security reasons, to cut gas ties to Russia. 

Support comes from the liberal opposition party, NEOS, Brussels, and the Austrian regulator.

Sufficient supplies

An exit from Russian gas would be possible immediately, said Alfons Haber, who leads the regulator E-Control. “Because we have high storage levels and the [European] market is liquid,” he told radio channel Ö1 on Thursday. Alternate supplies are available, he added.

Additionally, gas storage levels sit just below 80%, enough to supply the country for an entire year, even without any additional gas imports.

Othmar Karas, European Parliament vice-president for the centre-right EPP, made a similar push.

“We don’t need Russian gas, and we don’t want Russian gas,” said the senior politician, who is frequently at odds with his Viennese ÖVP colleagues, on Wednesday, calling for an exit date and “legally binding measures”.

He, too, cited the country’s comfortably full storage facilities. “Our gas supply is already secure without Russian gas until the end of 2025 – some even say that with a normal winter, [our stored gas] will last until 2026,” he told the press.

Karas is frequently isolated within his party and will quit politics in June. Lukas Mandl, his fellow ÖVP EU lawmaker, stressed that “naming a specific [Russian gas exit] date wouldn’t be serious” on 18 February.

Liberal party NEOS said on Wednesday that “the right time is now. Our high level of dependency is fatal”. The party cited the high gas prices paid by consumers compared to the rest of Europe.  

Because of the country’s dependence, “Austrian gas customers recently paid 20% more” than their European counterparts, Karin Doppelbauer, the party’s energy spokesperson, stressed ahead of an unsuccessful parliamentary bid to ban Russian gas by law. 

The contract nobody can read – and few actually want to break

Getting out of Russian gas means breaking the contracts with Gazprom that the utility OMV signed in 2018 for delivery of 6 billion cubic metres (bcm) per annum – almost all of Austrian gas demand – that run until 2040.

“We must get out of this contract,” said Gewessler.

But the stance of the Greens coalition partner remains unclear. ÖVP-Chancellor Karl Nehammer previously ruled out breaking the contract, citing potential economic impact. MEP Mandl said the government would have to conduct a legal examination first.

The first problem is that the contract with Gazprom is secret, even to lawmakers. Few terms are known: the annual gas volume is 6bcm and OMV must pay Gazprom no matter what, terms known as “take-or-pay” in the industry.

The second? The best chance for ditching the contract has already been missed.

“There was already the possibility of an exit a year ago, namely when Russia failed to deliver the amount of energy that was promised and contractually agreed,” said Karas.

When OMV didn’t tear up the contract then, citing a breach of trust, it de facto signalled that the cuts were acceptable to the company – claiming a breach of trust after the fact could still be possible, but experts question whether a given judge or arbitrator would accept the argument. 

A third problem is OMV’s ownership structure. While the company is Austria’s main supplier of energy, it is only partly owned by the state. The government owns 31.5%, 24.9% is held by the UAE’s ADNOC and the rest are free-floating shares. 

Forcing OMV to break its supply contract by law could result in Austria being taken to court over private business interference, right-wing politicians fear.

2025 looms

For those who want to tear up the contract, 2025 could be another opportunity.

“As things stand, Ukraine will not extend the gas transit contract [with Gazprom that expires end of 2024]. This means that the gas will no longer reach us, and we have the option of cancelling the contract,” says Karas.

With ample gas in storage, Austria could then turn to its other neighbours for gas – being land-locked, the country does not have the option of quickly erecting LNG terminals at its coast, a fact that politicians and spokespeople have seemingly well-rehearsed to ward off comparison with neighbouring Germany, where Russian gas imports hit zero in 2022.

However, whether the political will remains by 2025 is yet unclear.

Austrian elections will be held in September, and the far-right FPÖ – who previously signed a friendship treaty with Vladimir Putin’s “United Russia” party – is comfortably leading the polls with 30% of the vote. A right-wing FPÖ-ÖVP coalition is considered at least possible, some say its likely. 

And the party is no fan of getting rid of Russian gas.

Gerhard Deimek, an FPÖ MP and the party’s technology spokesperson, cautioned against “interfering in the business of companies traded on the stock exchange” for fear of reprisal on 18 February. 

When it comes to gas, the government had an obligation to ensure “sufficient volumes” at “a given price” – this should not be “subject to games, whether they are political or moral,” he stressed. 

[Edited by Nathalie Weatherald]

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