Austria will increase gas purchases from Norway instead of Russian gas

Norwegian energy group Equinor has signed a five-year gas supply agreement with OMV as part of the Austrian company's supply diversification strategy.

This was reported by Reuters.

Equinor will supply 12 terawatt-hours (1.1 billion cubic meters) of natural gas starting on October 1, with the start of the winter gas season in Europe, which will increase the volumes under existing contracts.

The gas will be delivered to THE (Trading Hub Europe), a virtual trading center in Germany for OMV's European portfolio, at an "at-market" price.

"With these new volumes, OMV continues its gas diversification strategy," the company said.

The Austrian company already purchases gas from Norway through long-term liquefied natural gas supplies through the Dutch Gate terminal and the European Union's Joint Gas Procurement Platform.

OMV also has long-term gas supply contracts with Russia's Gazprom until 2040.

"We have been observing an increasing demand for bilateral contracts from customers who see Norwegian gas as an enabler of energy security as well as of the energy transition," said Helge Haugane, Equinor's senior vice president of Gas & Power.

Norway has become the largest gas supplier to Europe, overtaking Russia, whose supplies to Europe have been cut due to the war against Ukraine and the explosion of the Nord Stream pipeline.

According to the government, landlocked Austria still receives about 66% of its natural gas imports from Russia via pipelines to Eastern Europe, and the country is looking to join new supply routes.

In 2022, Austria's annual gas consumption fell to 85 TWh (8 bcm) compared to 93 TWh in 2021.

As a reminder, despite the full-scale invasion of the country by Kremlin forces in February last year, Ukraine still receives transit fees, allowing Russian gas to pass through its territory to countries such as Austria, Slovakia, Italy, and Hungary. The route through Ukraine accounts for about 5% of all gas imports to Europe.

Author – Anastasiya Glotova, 27/09/2023