Russia stops selling gas to OMF, Austria's main provider

Russia's action came after OMV said it would stop paying Gazprom to offset a 230 million-euro arbitration award that it won from the International Chamber of Commerce over an previous cut-off of gas.

OMV, which provides most households with their gas, said in an email that no gas delivery was made from Gazprom after 6 a.m. on Saturday.

However Russian gas was still arriving in Austria on Saturday, albeit at a reduced level of about 20 percent, Handelsblatt quoted

The cut-off came after Austrian Chancellor Karl Nehammer on Friday held a hastily called news conference to reassure Austria that there was a secure supply of alternative fuel for this winter.

"We will not be blackmailed by anyone. Not even from the Russian president. We will not be brought to our knees by Putin's government, by Putin himself, but have taken precautions to ensure that we can defend ourselves for precisely this reason," he said in Vienna.

OMV said on Wednesday it has sufficient stocks to provide gas to its customers in case of a potential disruption by Gazprom, and said storage in Austria was at more than 90%.

Russia cut off most natural gas supplies to Europe in 2022, citing disputes over payment in roubles, a move European leaders described as energy blackmail over their support for Ukraine against Russia’s invasion.

European governments had to scramble to line up alternative supplies at higher prices, much of it liquefied natural gas brought by ship from the U.S. and Qatar.

EU Commission President Ursula von der Leyen posted on X that "Once again Putin is using energy as a weapon."

Austria gets the bulk of its natural gas from Russia, as much as 98% in December last year, according to Energy Minister Lenore Gewessler.

Ukraine has said it will not extend the transit agreement with Gazprom beyond January 2025 in a bid to choke off a source of income that Kyiv says Russia uses to fund its war.

Cold War supplies

Austrian gas imports from Russia date back to the Cold War. Austria was one of the first Western countries to import gas from the then Soviet Union in 1968 with the Baumgarten hub near the border with Slovakia handling deliveries via Ukraine.

But that relationship was due to come to an end early next year anyway with the expiration of the contract between Gazprom and OMV.

In the face of rising uncertainty around Russian gas supplies to Europe, Austria has also increased efforts to secure supply from other countries, such as Turkey and Norway.

"In terms of security of supply, it's not really a problem. We have enough gas in storage and there are enough other gas sources. This means that there will be no shortage, even if the winter gets very cold. But we are already seeing a price consequence," said Walter Boltz, a former board member of Austria’s electricity and natural gas markets regulator, E-Control.

Prior to the 2022 invasion of Ukraine, Russia supplied the EU with around 40% of its gas needs.

Despite a huge drop in supply since the Kremlin began its all-out war on Ukraine, the EU still relies on Russia for almost a fifth of its gas supplies and Energy Commissioner Kadri Simson demurred when asked whether the bloc was ready to include it in an ever expanding sanctions regime.

"We remain fully committed to completing the phase out of Russian gas, which can be done without challenging Europe's energy security of supply," Simson told reporters in Brussels last week as she unveiled the annual State of the EU Energy Union report.

It recognises that although consumption of Russian gas has fallen dramatically from the 150 billion cubic metres, or 45% of all imports before the invasion, the country still relied on Russia for 18% of imports in the eight months to August – slightly more than total LNG imports from the US, meaning Russia is still Europe's second largest supplier after Norway.