Russia's Gazprom signs new supply contracts with Austria through 2027

Russia's OAO Gazprom has signed long-term gas supply contracts to sell Austria 7 billion cubic meters of gas per year through 2027, the company said Friday.

Photo: Russia's Gazprom signs new supply contracts with Austria through 2027

A Gazprom statement provided no details of the value of the new agreement, which it said was signed Thursday in Vienna. The previous deal had been due to expire in 2012.

Gazprom will sell its gas to EconGas, a 50 percent subsidiary of Austria's OMV Gas International, which will work directly with the Russian monopoly's export wing, Gazexport, the statement said. Previously, Gazprom had sold its gas to OMV Gas International.

At the same time, the statement said that two Gazprom subsidiaries working in Austria GWH and Centrex Europe Energy & Gas AG had acquired the right to sell directly to customers in Austria.

"The new contracts with our Austrian partners are yet another example of the successful implementation of Gazprom's strategy to enter the end consumer market in Europe and to increase the effectiveness of the export of Russian gas," Gazexport head Alexander Medvedev said in a statement.

Gazprom has set itself the goal of controlling a bigger chunk of the gas supply chain to Europe, which would allow it to sell its gas directly to European households at retail prices, reports AP.

Some officials in Europe have taken a dim view of the company's expansion plans after a bitter New Year's price fight with Ukraine during which Gazprom temporarily cut off the former Soviet republic's supplies.

Ukraine skimmed the gas it needed from export pipes crossing its territory, resulting in shortfalls for some European consumers. The decision to turn off the tap to Ukraine was widely seen as aimed at weakening Ukraine's Western-leaning president and stirred fears that Russian gas supplies a quarter of Europe's consumption were tied up in the Kremlin's political games.