EU could ban Russian gas imports this year, Austrian government advisor says

Aura Sabadus


LONDON (ICIS)–Russian pipeline gas exports to Europe could be banned as early as the end of this year if a number of preliminary measures are put in place, an energy advisor to the Austrian government told ICIS.

Walter Boltz, the former head of the Austrian regulator E-Control, said there is increased recognition at EU level that the bloc can cope without the remaining Russian pipeline gas currently exported via Ukraine and Turkey.

“If there was a major case to put in place another round of implementable sanctions against Russia, then [pipeline] gas would be a logical candidate,” he said.

Boltz added that Ukraine itself, historicall y Europe’s main transit route for Russian gas, may push for a ban on pipeline imports, noting that the transit revenue it gets is insignificant compared to the cash raked in by Russia from gas sales.

Russia has a contract with Ukraine for the transit of 40bcm/year which is due to expire in 2024.

However, since last May, Russia has been shipping only 40% of contractual volumes and is thought to be paying Ukraine $800milion annually instead of more than $1bn, which is required under contractual terms.

He said he was confident Ukraine would be willing to continue the transit until its expiry but stressed there was also a strong case for Kyiv to lobby the EU for sanctions.

“If you think that Russia is making $15-$25bn annually from gas sales and Ukraine only $800m in transit, it would make every sense in the world for Ukraine to forego the transit and stop Russia from getting this money,” Boltz added.

Since its invasion of Ukraine, Russia switched from being Europe’s largest exporter of gas to a minor supplier, delivering around 24bcm/year to Europe via Ukraine and Turkey. The volumes are 80% lower than what it sold prior to the start of the invasion in February 2023.

The EU set a phase-out date for 2027 but Boltz believes this could be implemented much sooner.


Around 12 billion cubic meters of Russian gas are exported annually via Ukraine and the two major off-takers are Austria and Slovakia, each taking around 4-5bcm/year.

Smaller volumes entering Austria via Ukraine have also ended up in Germany, Hungary and Slovenia. Italy had also imported gas in the first quarter of the year but the country is actively working to diversify away and has stated that it would no longer buy Russian gas after the end of 2023.

Boltz, together with Gerhard Roiss, the former CEO of Austria’s OMV, have now prepared a proposal for the Austrian government on steps to phase out Russian imports into the country.

“Around 2-3bcm of gas could be imported as [regasified] LNG through Italy and the same amount could come from the North Sea or from LNG through Germany.

“We suggested it would be wise to start reserving capacity now. You can still buy a fair amount at the upcoming annual capacity auction next month.

“Once there is a real disruption of Russian gas flows it would be a lot more expensive. Suddenly, it would not be just Austria but also Hungary and Slovakia and maybe Slovenia and for all those uses there may not be enough capacity or it would be a tight fit to transport that into Austria.”

Boltz said central European buyers would also need to take in consideration Ukraine’s needs. The country stopped importing Russian gas in 2015 but some of the transit gas to central Europe had been historically reversed back into Ukraine.

Another solution for Austria could consider would be to buy some options for gas volumes.

“Let’s imagine TurkStream and Ukraine transit gas stops. Then we are short of 20-22bcm/year which is more than we have in terms of reserve capacity.

“Then it would be a scramble to get some gas and for whoever has the gas secured through an option, it’s much more convenient to know they have it and don’t have to think how much they have to pay,” he explained.


Boltz agreed that a ban while Austria, where there is some political support for the ban, in neighbouring Hungary, which has more friendly relations with Russia, this may not be the case.

Hungary signed a 15-year 4.5bcm/year supply contract with Russia which started in October 2021.

Around 80-85% of volumes are imported via Turkey and the Balkans and the rest is sourced via Austria.

“In theory, sanctions could be prepared in a matter of weeks but one can expect Hungary to drag its feet and ask for exemptions,” he said.

Recently, Hungary signed a new energy cooperation agreement with Russia on 11 April that will allow it to increase natural gas imports beyond the long-term contracts already in place.

The deal also extended Hungary’s option to defer payments to Russia for gas over a €150/cubic metre of natural gas price threshold, regardless of the current market prices.

Even so, at the end of May, Hungary said it was in discussions for an LNG supply deal with Qatar.


Boltz agreed that while banning Russian pipeline gas would be ‘pretty straightforward’, sanctions on Russian LNG imports would be ‘trickier’.

Over 18bcm/year of Russian LNG were imported into Europe (excluding Turkey) last year, primarily by companies in France, Spain or Belgium.

He said that even if the EU were to consider a ban on LNG, Russia would be in a position to divert it to other markets around the globe.

“In this case, we would need to consider something similar to the price cap on oil [where Russian producers cannot sell above a set price].”

This means that it may take longer for the EU to find workable solutions.

Boltz also agreed there was a risk that Russian pipeline gas may end up in Europe via Turkey, potentially under a ‘whitewashed’ label.

Russia and Turkey are working to set up a gas hub in Turkey but Boltz said such a project would need a market structure to be implemented and a high level of trust in the regulatory and legal framework, which Turkey may not have right now.


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