Austria Plans To Power Industry With Oil Instead Of Gas

Austria's energy minister said it intends to order industry and utilities to switch from using natural gas as it looks to stockpile more natural gas to help insulate it from being cut off from Russian supplies, Reuters reported on Tuesday.

Austria will encourage industry and utilities to use alternate fuels such as crude oil, Austrian energy minister Leonore Gewessler said.

Austria gets 80% of its natural gas from Russia. And while its electricity is generated mostly from hydropower, its industrial sector and utilities, however, use a significant amount of natural gas. Natural gas is commonly used in district heating.

 "Power plants and industrial companies will be instructed to upgrade their systems for dual operation to the extent that it is technically and economically feasible. That means that plants can run on natural gas as well as on other energy sources - in most cases it will be crude oil," Gewessler told a news conference.

The government is working on a draft of the direction it will provide to industry and utilities, but it will need to be signed off on by the main committee of the parliament's lower house.

The announcement comes as Austria contends with a slowdown in the amount of natural gas heading into storage.

Russian President Vladimir Putin said at the end of May that Russia would continue to meet its natural gas delivery commitments to Austria. Austria's OMV opened up a rubles account with Gazprombank to pay for Russian gas imports, but gas supplies dipped in June by 50 percent after Gazprom said it would reduce the amount of gas supplied.

As of Tuesday, Austria OMV said its gas imports from Russia had rebounded to 60% of contractual volumes.

By Julianne Geiger for Oilprice.com

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