Austria Sees Need to Curb Russian Gas Reliance as Supply Risks Exposed

(Bloomberg) -- Austria must move faster to curb its reliance on Russian natural gas, Energy Minister Leonore Gewessler said, after a weekend rebellion against the regime in Moscow raised the risk of sudden supply disruptions.

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“It’s clear that we’re not far or fast enough down the path to eliminate Russian gas,” she said Monday at a press briefing in Vienna after meeting with utility executives. “Russia supplies are insecure and will remain insecure.”

Her comments follow weeks of market jitters over the medium-term outlook for gas flows into central Europe, where Russia provides more than half of Austria’s supply. That fuel still flows through pipelines located in Ukraine and could be cut off any day, Kyiv’s top energy official has warned.

Benchmark European gas prices rose as much as 14% on Monday amid increased geopolitical risk following the Wagner mercenary group’s short-lived mutiny in Russia.

Austria has made it clear the companies in the country shouldn’t enter into any new agreements to purchase Russian gas, Gewessler said. For more than half a century, state-controlled OMV AG has been the principle conduit for Russian gas flows into Austria, and the company still has a long-term supply contract until 2040.

Shorter-term risks to the economy are contained, according to Gewessler. Austrian gas-storage depots — the European Union’s fifth biggest — are 81% full, compared with just 45% a year ago. Companies have so far tendered some 13 terawatt-hours of non-Russia fuel purchases via the bloc’s joint trading platform.

Still, if flows come to a sudden stop, either because of fighting in Ukraine or a Russian decision to stop selling, consumers in central Europe are in for a price shock, said government energy adviser Walter Boltz.

“There’s still a lot to do,” he said. “The positive supply situation at present can quickly be tipped into a costly crisis through a sudden interruption of Russian supply.”

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