Austrian Energy Giant Sees No Alternative to Russian Gas in Europe

Austrian oil and gas company OMV wants to expand its cooperation with Russia's Gazprom as part of its new strategy to be unveiled early next year, the company’s CEO said on Thursday, nachrichten.at reported.

Rainer Seele, who took over as OMV's CEO in July, said priorities in cooperation with Gazprom included construction of two new gas pipelines via the Baltic Sea to Germany, known as Nord Stream 2, and asset swaps including the potential development of gas deposits in Siberia.

The two companies could also work together on joint projects abroad including with Gazprom's oil arm, Gazprom Neft.

Rainer Seele defended the new Nord Stream project saying Europe needs additional volumes of Russian gas due to falling production in Britain, the Netherlands and Germany.

"Europe needs Russian gas. I don't see any short or long-term alternatives. This should be decided by companies that import gas, not by politicians," he said, adding that he was more worried about gas deliveries from North Africa, than from Russia.

Seele said he was certain that in the long haul gas consumption in Europe was bound to grow, hence his company’s participation in the Nord Stream project, especially now that the Nabucco and South Stream projects never materialized.

Mentioning Iran’s return to the global fuel market, the OMV head said that even if the sanctions imposed on Tehran were lifted "this does not mean that Iran will become a stable country."

Any long-term production uptick in Iran will require billions of dollars’ worth of investments, Seele said, adding that he did not think that Iranian gas would come to Europe any time soon.

"Even if the Iranian gas industry starts to grow it will focus on domestic consumption and export to neighboring countries only," Rainer Seele said in conclusion.