Gas supplies. Photo supplied
Vienna

Russia, Austria sign energy contract

Russian President Vladimir Putin said after talks with Austrian President Alexander Van der Bellen on Tuesday in Vienna, that US-imposed sanctions were harmful to countries imposing them as well as countries on the receiving end.

Published: June 6, 2018, 9:33 am

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    Both countries have signed an advantageous energy contract.

    “Both those who initiate these actions and those such measures that we call sanctions are aimed against find them harmful. Apparently, everybody, including ourselves, are interested in their cancellation. We are perfectly aware that each individual member country of the European Union finds it rather hard to say so, but all that is happening in this sphere does not impede the development of relations with Austria. And we will use every opportunity to do this further on and to implement the plans I’ve just mentioned,” the Russian president who is on a state visit to Austria, said.

    Unlike the US, Russia doesn’t suffer from a lack of trust, and it remains open for cooperation with other countries, he said. “We are open, ready for cooperation,” Putin noted. Russia’s Gazprom and Austria’s OMV signed a gas supply contract until 2040.

    According to Putin, the mechanisms and instruments for cooperation damaged by sanctions, is being revived “Gradually, bit-by-bit this work is revived, we can see this,” he explained. “And in my opinion, they proceed very constructively, though not easily,” he added.

    Importing liquefied natural gas from the US is three times more expensive that buying it from Russia, Van der Bellen noted after signing a gas-supply contract with Moscow. Austria is a major transportation hub for Russian gas being exported to Europe.

    The US is force-feeding Europe its LNG, the Austrian president said. “American liquefied gas is two or three times more expensive than Russian gas. Under such circumstances, it makes little sense in purely economic terms to replace Russian gas with American LNG,” Van der Bellen said at a press conference.

    “Austria has become one of the key, if not to say, one of the most important units of Russian gas transportation to Western Europe and plays an important role in ensuring the energy security of the entire European continent,” Putin said, adding that Russia has exported more than 200 billion cubic meters of natural gas to Austria in the past 50 years, cementing a reliable partnership.

    Austrian Chancellor Sebastian Kurz also stressed the importance of Russian gas shipments to his country to TASS news agency in an interview. “I would like to note the fruitful cooperation of the two very important companies – OMV and Gazprom – which seems to me extremely beneficial for both sides.”

    OMV and Gazprom are now implementing the Nord Stream 2 pipeline, which seeks to double the capacity of the existing Nord Stream. The project is facing hard opposition from the US.

    The United States has already sanctioned foreign companies involved in Russian energy exploration using the referendum in Crimea as an excuse.

    The 1200km-long pipeline through the Baltic Sea is funded by Russian state-owned giant Gazprom and a group of major European energy firms.

    Construction on the German section of the project began in May, but new sanctions being considered by Washington threaten to crush the project before it is finished.

    A bipartisan group of US lawmakers have urged President Donald Trump to block Nord Stream 2 by slapping financial penalties on the participating companies.

    Michael Harms, member of the German Committee on Eastern European Economic Relations, told German public broadcaster Das Erste: ”This is of course poison for any long-term strategic commitment.”

    Currently, more than half of Russian gas exports to Europe are routed through war-torn Ukraine. Supporters of Nord Stream 2 say it would increase security of supply.

    Both Poland and Lithuania, which oppose Nord Stream 2, have built terminals for liquefied natural gas, or LNG.

     

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