By Nikolaus J. Kurmayer
(EurActiv) -- The Russian energy company Gazprom will stop sending gas to Austria effectively this weekend, said the country's energy major supplier, OMV.
After OMV was awarded €230 million in damages in an arbitration against Gazprom, it announced its intention to stop paying bills to recoup the money. In response, the state-owned Russian company is turning off the tap, the company said on Friday.
From 6am on Saturday (16 November), Gazprom will no longer send gas to Austria despite its contract with OMV until 2040 – the energy major is the only direct buyer of Russian gas, which makes up more than 90% of the supply.
"OMV ... has just been informed by Gazprom Export that Gazprom Export will suspend - and thus reduce to 0% - its deliveries of natural gas," the company said in a statement.
Despite that, Austria is not expecting an immediate gas shortage in the coming winter – the country’s storage facilities hold a whole year’s supply and are 90% full.
The move potentially ends a six-decade history of Austria receiving gas from Russia, first offered after Moscow blocked the alpine country from joining the EU, forcing it to remain a neutral country in the Cold War.
“The actions of Russia’s Gazprom today prove once again that Russia is not a partner,’ said Energy Minister Leonore Gewessler (Greens) in a statement.
“But tomorrow also marks the end of a risk. If we no longer receive supplies from Russia, we can no longer be blackmailed,” she added.
Austria is locked into a long-term contract until 2040 and may now finally be able to break it in a way unlikely to see the company lose any arbitration case.
Previously, OMV’s arbitration win against Gazprom has already pushed Europe’s nervous gas markets to a three-month high, with a 10% price increase since the company announced its award on 13 November.
The energy major is already betting on contracted gas from Norway and global LNG markets to replace Gazprom supplies.