Environment Minister Leonore Gewessler wants to investigate the consequences of an early termination of the Russian gas supply agreement and quickly prepare for the end. In December, despite alternatives, the Russian import share rose again to 98 percent.
Leonore Gewessler wants to stop the supply of Russian gas and legally force domestic companies to switch to alternatives. “The transition is going too slowly, we no longer want to watch.” OMV’s contracts with Gazprom run until 2040 and provide for a fixed purchase obligation. So you have to pay, regardless of whether gas is flowing or not.
Experts must prepare reports
The Austrian Institute for Economic Research will therefore determine by the summer what economic consequences and risks a contract termination would have and what dangers a longer dependency entails. Then actions must follow.
But something also needs to change among suppliers, the minister said. The share of Russian gas has risen sharply again in the past three months and even reached 98 percent in December.
In the future, suppliers will be required to demonstrate an increasing share of non-Russian gas and be able to compensate for a loss of Russian gas through other sources. However, a corresponding law needs a two-thirds majority in parliament and is unlikely to be adopted before the elections, much like the end of Gazprom contracts.
“OMV always adheres to sanctions and the law”
“Russian natural gas is not subject to sanctions in Europe and is imported by several countries,” OMV said in a statement to the APA. “If the legislature wants to phase out Russian gas, the legal basis must first be created.”
It continued: “OMV complies at all times with sanctions and the law and has already consistently diversified its sources of natural gas supply for all its contract customers. If necessary, OMV can supply its customers in Austria with 100 percent non-Russian gas.”
It is still unclear whether and on what basis terminating the contracts is at all possible. E-Control boss Wolfgang Urbantschitsch said in November last year: “As long as they (Gazprom, note) deliver and the contract is valid, OMV will probably have to honor this contract as well.” The question was whether Gewessler could also breach the contract if necessary. She did not give a direct answer to what Gazprom would risk – one had to “explore all possible courses of action”, the minister said. It is also unlikely that the government knows the exact contents of the contract. “OMV’s gas supply contracts are subject to the confidentiality of both contracting parties,” the company said on Monday.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
