Russian de-facto gas export monopoly Gazprom has agreed to boost contracted gas supplies to Austria by 1 billion cubic metres (bcm) per year, as demand for natural gas continues to rise.
Austria, which enjoys good relations with the Kremlin, has extended its gas import contracts with Gazprom despite heavy opposition from the US and the European Commission to growing dependence on Russian gas.
Austria is Gazprom’s fastest growing European customer with the company reporting record exports to Austria last year of over 9.1 bcm, a 50-per-cent increase from 2016.
In 2005, 2.3 bcm was imported.
OMV and Gazprom co-operate in gas production, transport and supplies.
Gazprom’s western exports have boomed as European production has declined. Expecting the trend to continue, Gazprom and Austria’s OMV in June extended their gas supply contract from 2028 to 2040.
“Europe’s demand for gas will rise primarily as the result of gas-fired power plants successively replacing coal, coupled with the simultaneous decrease in European production,” said OMV chairman of the executive board Reiner Seele.
The increase in contracted gas supplies from Russia would consolidate Austrian energy supplies, he said.
“By increasing gas supplies to Baumgarten in lower Austria, we are making an additional contribution to security of supply in Austria – as well as to other European countries,” Seele said in a statement.
Gazprom’s gas supplies to Austria have already grown by a third year on year to 8.8 bcm in the first 10 months of this year, Gazprom said.
“Gazprom’s exports to Austria have been setting records again and again in the past several years,” announced Gazprom’s chief executive Aleksei Miller. “The signing of the agreement on additional export volumes once again confirms our European consumers’ high demand for Russian gas.”
OMV is also involved with Gazprom on the divisive Nord Stream 2 pipeline, which is set to redirect most gas supplies under the Baltic Sea, instead of through Ukraine. The 55-bcm-per-year pipeline is opposed by the three Baltic states, Poland, Ukraine, Brussels and the US amid fears about over-reliance on a political, and potentially military, adversary.
OMV also has a sales agreement with Gazprom to buy a 24.98-per-cent interest in two areas of the Achimov formation of West Siberian Urengoy gas condensate field, expected to be launched in 2020.
Gazprom increasingly dominates European gas supplies. Picture credit: YouTube