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Austria seeking to end Russian gas import contract, energy minister says

Published 02/12/2024, 05:49 AM
Updated 02/12/2024, 11:06 AM
© Reuters. Austrian Minister of Climate Action and Energy Leonore Gewessler speaks during a press conference in Vienna, Austria, October 17, 2023. REUTERS/Leonhard Foeger

VIENNA (Reuters) -Faced with stubbornly high Russian gas imports as the war in Ukraine rages on, Austria is seeking to take more radical steps, including ending energy company OMV's long-term contract to buy gas from Gazprom (MCX:GAZP), Austria's energy minister said on Monday.

Having long sought to maintain close ties with nearby Russia, Austria sought to end its decades-long dependency on affordable Russian gas soon after Russia invaded Ukraine in 2022, scrambling to find alternative providers.

While political leaders like Energy Minister Leonore Gewessler of the Greens repeated that Moscow was no longer a reliable partner, partly state-owned oil company OMV made clear that it would keep buying gas from Gazprom under a contract that runs until 2040.

At a news conference called at a day's notice, Gewessler said the Russian share of Austria's gas imports actually increased in December to a new record of 98% from 76% the month before, even if the total volume of imports fell slightly.

"The market and the energy companies that are part of it are not fulfilling their responsibility to reduce the dependency on Russian gas sufficiently," Gewessler said. "The diversification of our gas imports is advancing far too slowly."

Gewessler said her ministry was tasking economic think-tank Wifo with producing a study by the summer on the economic impact of ending the contract and the dangers of remaining dependent on Russian gas.

"We must prepare to exit OMV's long-term contracts," she said.

OMV issued a statement saying Russian gas is not under sanctions in the European Union and various countries import it, adding: "If lawmakers wish to abandon Russian gas, the legal basis for that must first be created."

© Reuters. Austrian Minister of Climate Action and Energy Leonore Gewessler speaks during a press conference in Vienna, Austria, October 17, 2023. REUTERS/Leonhard Foeger

The energy ministry also said it plans to make it compulsory for companies selling gas in Austria to take concrete steps to reduce the proportion of Russian gas in their mix. It will examine the legal basis for such a requirement, which will require a two-thirds majority in parliament to become law, Gewessler added.

It was not clear to what extent the left-wing Greens' coalition partner, Chancellor Karl Nehammer's conservative People's Party, was involved in the plans announced on Monday. A parliamentary election will be held by autumn of this year and the far-right Freedom Party is leading in the polls.

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