The energy sector plays a key role in trade and economic relations between Russia and Austria.
The supply of Russian natural gas to Austria and third-party countries via Austria is a key area of energy cooperation between the two countries. Austria produces 1.7 billion cubic metres of gas a year, whereas imported natural gas accounts for about 80% (gas consumption in the country stands at 10 billion cubic metres a year). In 2009, Russia exported 5.4 billion cubic metres of gas to Austria and in 2010 they plan to increase the supplies to 6.0 billion cubic metres.
Since 2006, the gas firms GWH and Centrex set up by Gazprom and Austria's OMV have been engaged in direct sales of gas in Austria, in particular in Carinthia, Styria and Salzburg. In this way Gazprom Export entered the end user market in Austria.
Talks between Russia and Austria are currently underway to revise the gas price under the gas supply contracts in response to the impact of the global economic and financial crisis and sagging demand for natural gas in Austria.
Austria's ramified gas-distributing system (25,000 kilometres of pipelines) has secured an important role for the country in the transportation of Russian gas to Italy (Trans-Austrian gas pipeline TAG), France and Germany (gas pipelines WAG and PENTA West), Hungary (HAG), Slovenia and Croatia (south-eastern gas pipeline SOL).
More than 3 billion cubic metres of natural gas a year is currently transported from Russia to Germany, Italy and Austria's Haidach natural gas storage facility along TAG, WAG and PENTA West gas pipelines under a transportation agreement signed by Gazprom Export and GWH on November 9, 2006. From 2011 to 2018, Gazprom Export plans to expand the TAG gas pipeline capacities it has acquired to 4.7 billion cubic metres. The pipeline capacity can be boosted to a maximum of 30 billion cubic metres of natural gas.
The transportation of gas via Austria has been further facilitated by the construction of the Haidach natural gas storage facility, which was Gazprom's first gas storage project in Western Europe. The first phase of the Haidach storage facility was put into operation in May 2007.The second phase planned to be completed in 2011 will significantly enhance the reliability of Russia's gas supplies to its European partners and boost sales, thereby helping to avoid penalties for delivering less gas than is due.
Since early 2007, in line with its strategy to diversify Russian gas export routes to Europe, Gazprom has been exploring the possibility of implementing its South Stream project to lay gas pipelines that will run under the Black Sea from Russia to Bulgaria and on to other European countries.
One likely route for the land portion of the pipeline project outside of Russia is a 52-kilometre section that will run across Austrian territory as far as Baumgarten. Russia and Austria are continuing to work on a draft inter-governmental cooperation agreement that will cover the period of construction and the operation of the Austrian section of the South Stream pipeline. The last time the two countries held a regular consultation on this issue was on March 5, 2010.
Today, cooperation between Russian and Austrian companies in the oil sector is confined to OMV's occasional purchases of crude in Black Sea ports from where it is first shipped and then pumped along OMV's Trans-Alpine pipeline, TAL, to the oil refinery in Schwechat not far from Vienna. Rail transport is also used for routine deliveries of crude from the Druzhba oil pipeline terminal in Bratislava, the capital of Slovakia; the Druzhba pipeline was built to carry Russia's crude to Europe.
The main obstacle for the increase of Russia's oil export to Austria is a lack of an adequate pipeline infrastructure - the Druzhba pipeline needs to be extended an additional 60 kilometres. The extension of the pipeline from Bratislava to Schwechat could facilitate the direct supply to the refinery of 3 to 5 million metric tonnes of Russian crude a year. Participants in the Bratislava-Schwechat oil pipeline project, should it be realised, would be able to appreciate enhanced energy safeguards that the project would offer to the European countries as the construction of the pipeline would close the gap in the Trans-European pipeline system.