Russia Stops Gas, Nehammer: ‘No Austrian Home Will Freeze’

Russia Stops Gas, Nehammer: ‘No Austrian Home Will Freeze’

Bundeskanzler Nehammer. Photo: APA/BKA/ALEXANDER ZILLBAUER

The Russian Gazprom Group will stop gas deliveries to OMV on Saturday morning. Chancellor Karl Nehammer (ÖVP) announced on Friday evening during a press statement in Vienna that he had been informed of this development earlier in the afternoon. “We are well prepared,” Nehammer said. “I can promise you that no one in Austria will freeze due to a gas shortage, and no apartment in Austria will remain cold,” he added. “The Republic of Austria is not susceptible to blackmail.”

Gazprom has repeatedly failed to deliver promised gas volumes to pressure Austria into withdrawing its support for the EU’s sanctions policy against the Russian Federation, the Chancellor explained. However, Austria’s gas storage facilities are currently 93% full, including strategic reserves, the total stored gas amounts to 94.5 terawatt-hours, more than enough for Austria’s annual demand, which stood at 75.6 terawatt-hours in 2023.

“We will not let ourselves be blackmailed by anyone—not even by the Russian President,” Nehammer said. “We will not be brought to our knees by Putin’s government or Putin himself.”

The Suspension of Deliveries and Legal Disputes

Starting on Saturday at 6 a.m., no gas will flow to OMV in Austria. This was initially reported on Friday afternoon by the Central European Gas Hub (CEGH Remit) platform. Gazprom itself did not immediately confirm the development when asked by APA. Earlier, OMV had announced that it would stop payments to Gazprom to recover a multimillion-euro award granted in arbitration. On Wednesday, the partially state-owned company was awarded over €230 million in damages under the rules of the International Chamber of Commerce for undelivered gas in Germany. OMV intends to offset this amount against payment obligations to the Russian gas supplier, which previously delivered 178 GWh per day.

Nehammer said there is no expected impact on gas prices because Austria’s gas storage facilities are well-stocked, and the country’s consumption is not market-relevant within the EU. However, he added that speculation will be closely monitored.

Despite these assurances, the financial news agency Bloomberg reported a steep rise in prices following Gazprom’s announcement. In Austria, some household customers have so-called floating tariffs, which are linked to current market prices, a market participant explained. Industrial customers who often pay market prices could also face higher costs.

The European gas price rose sharply on Friday evening—the benchmark TTF contract for delivery in one month increased on the Amsterdam exchange to over €46 per megawatt-hour (MWh), the highest level in over a year.

Preparedness and Alternative Supplies

The impact on Austria’s gas supply is expected to be minimal, OMV CEO Alfred Stern assured APA on Thursday. The company has been preparing for this scenario for three years. Alternative sources include gas from Norway, domestic production, and liquefied natural gas (LNG) transported by ship via Germany or Italy. With gas reserves totaling 95 terawatt-hours, Austria’s needs for several months can be covered.

OMV reaffirmed on Friday evening that it will continue to supply gas to its customers. “As a reliable supplier and partner, OMV will ensure secure and uninterrupted supply to its customers,” the company said in a statement to APA.

Even without the arbitration decision, the 56-year partnership would likely have ended early next year. According to current plans, the transit agreement for Russian natural gas deliveries via pipelines through Ukraine and Slovakia is set to expire at the end of 2024.

Regulatory authority E-Control confirmed that Austria’s gas supply is secure thanks to alternative sources. The supply situation will continue to be closely monitored by the relevant authorities, the agency added in a Friday evening statement.

Lower Austrian supplier EVN also reassured its customers, highlighting that gas storage facilities are well-stocked and that preparations have been made for a potential Gazprom delivery stop. Starting January 1, 2025, EVN will rely exclusively on 100% certified Austrian natural gas.

Upper Austrian energy provider Energie AG similarly sees no reason for concern. A spokesperson told APA on Friday evening that gas storage levels are 95% full and that sufficient reserves have been built up for household customers. “Supply security is ensured for this heating period until April/May 2025,” she said.

Political and Regional Reactions

Vienna’s Economic Councillor Peter Hanke (SPÖ) stated, “We’ve known for over two years how fragile the energy markets and the supply of Russian gas are. That’s why I instructed Wien Energie to switch to alternative sources as quickly as possible. Our foresight has proven to be the right decision.” Wien Energie has diversified its sources and signed contracts with European trading partners in September.

Burgenland is also prepared for the delivery stop, Governor Hans Peter Doskozil (SPÖ) and Stephan Sharma, CEO of Burgenland Energie, announced in a joint statement. Sharma explained that a gas task force was established earlier this year to secure the region’s gas supply for the winter. Doskozil added that the regional government will maintain its heating price cap to cushion households against high heating costs.

“The actions of Russian Gazprom once again prove that Russia is not a reliable partner,” Environment Minister Leonore Gewessler (Green Party) said in a statement. “But with the end of Russian gas deliveries, we also eliminate a threat. Without Russian supplies, we are no longer susceptible to blackmail,” she added.

FPÖ Secretary-General Christian Hafenecker criticized the government, stating, “It’s exactly what we Freedom Party members have been warning about for over a year.” Hafenecker urged the government to ensure long-term energy security, emphasizing that affordable and reliable energy supply must be guaranteed not only for households but also for small- and medium-sized businesses and the industrial sector.

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