Written by Vladimir Soldatkin and Guy Faulconbridge
MOSCOW (Reuters) – Russia halted gas deliveries to Austria on Saturday in a dispute over payments but continued to pump steady volumes to Europe via Ukraine after remaining buyers asked for more fuel.
Russia, which before the Ukraine war was Europe’s single largest supplier, has lost almost all of its European customers as the EU tries to reduce its dependence and after the Nord Stream pipeline to Germany is launched in 2022.
Now one of the last main routes for Russian gas to Europe – the Soviet-era Urengoy-Pomary-Uzhgorod pipeline through Ukraine – will be closed at the end of this year, as Kyiv does not want to extend the five-year transit agreement. it delivers North Siberian gas to Slovakia, the Czech Republic and Austria.
Austria said on Friday that Moscow had announced that the gas would be shut off following the awarding of OMV, Austria’s largest energy company, due to the non-replenishment of supplies at its German unit by Russian state company Gazprom (MCX:).
On Saturday, Austrian energy regulator E-Control said Gazprom’s deliveries to OMV stopped at 6 am (0500 GMT), adding that prices and supplies to Austrian customers remained unchanged.
OMV wants to return 230 million euros ($242 million), which was awarded during the arbitration, to Gazprom by canceling the claim on invoices for deliveries to Austria – essentially stopping further payments for gas supplied through Ukraine.
Gazprom declined to comment on the suspension of Austrian flows, but the Russian company said it would send 42.4 million cubic meters of gas to Europe via Ukraine on Saturday, the same volume as on Fridays and among all other days in recent months.
Slovakia’s state-owned company, SPP, said it was still receiving fuel from Russia and added that others were buying it.
“The situation where the main buyer stops taking gas from the east, but the same volume flows in the territory of Ukraine, shows that there is still a lot of interest in this gas in Europe,” SPP said in a statement, without naming other buyers. .
OMV usually accounts for about 40% of Russian gas flowing through Ukraine, or 17 mcm per day.
Austrian grid operator AGGM said it is currently not switching imports from Germany or Italy. Austria previously said it had plenty of stocks to cover the shortfall.
GAS POLICY
Chancellor Olaf Scholz spoke with President Vladimir Putin on Friday for the first time in nearly two years, as European leaders await to hear Donald Trump’s views on ending Europe’s biggest global war since World War II.
According to the Kremlin, Putin told Scholz that Russia has always fulfilled its energy supply contract obligations and is “ready for beneficial cooperation if the German side shows interest in this”.
Soviet and post-Soviet leaders spent half a century since the discovery of Siberia’s vast gas deposits in the post-WW2 years building an energy business linking the Soviet Union, then Russia, with Germany, Europe’s largest economy.
Wars, and explosions, destroyed that connection, damaging the economy of both countries.
At its peak, Russia supplied 35% of Europe’s gas but since the war began in 2022 Gazprom has lost market share to Norway, the United States and Qatar.
The Yamal-Europe pipeline through Belarus was closed after the conflict, while Russia blamed the United States and Britain for an explosion under the Baltic Sea that blocked the Nord Stream route.
Washington and London have denied blowing up the pipelines. The Wall Street Journal reported that Ukrainian officials were behind the attack. Kiv denied that.
Apart from Austria, Russian priorities will only go to two European countries, Hungary and Slovakia, in the case of Hungary through a pipeline that goes through Turkey.
Russia sent nearly 15 billion barrels of gas through Ukraine by 2023, about 8% of the top Russian gas flowing to Europe via various routes in 2018-2019, according to data compiled by Reuters.
By 2023, the Ukrainian transit route would meet 65% of gas demand in Austria and its eastern neighbors Hungary and Slovakia, according to the International Energy Agency.
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