VIENNA – Russia’s state-owned natural gas company Gazprom will cut off supplies to Austria’s OMV service early Saturday, the Austrian Chancellor said, adding that his country’s underground gas storages are full and it has alternative sources outside Russia.

The cut comes after OMV announced it would stop paying its Austrian arm for Gazprom gas in a bid to offset the 230 million euro ($242 million) arbitration award it had won over earlier gas cuts to the German subsidiary.

Chancellor Karl Nehammer said on Friday that Austria has a safe alternative fuel source and that “no one will freeze this winter, no house will be cold.”

Nehammer hastily made a statement to the Prime Ministry and said, “Our gas storage facilities are full and we have sufficient capacity to obtain gas from other regions.” “We can’t be blackmailed.”

OMV made notice of the outage in a trading statement on the Central European Gas Center website. An OMV spokesperson could not be reached for comment. Gazprom had no comment on the matter.

Russia has cut off most natural gas supplies to Europe in 2022, citing disagreements over payment in rubles. European leaders described this move as energy blackmail due to their support for Ukraine against Russia’s invasion. The outage caused gas prices to soar and contributed to a sharp spike in inflation, which rose to double digits in October 2022 but has since subsided.

European governments have had to scramble to create alternative sources at higher prices, much of it liquefied natural gas brought in by ships from the United States and Qatar.

Still, three European countries (Austria, Slovakia and Hungary) receive Russian gas through a pipeline through Ukraine, despite the conflict there. Ukraine announced that it would not continue gas transit after January 1, causing these countries to look for other materials. According to Energy Minister Lenore Gewessler, Austria will receive the majority of its natural gas from Russia in December 2023, i.e. 98%.

The European Union has terminated most supplies of Russian oil but has not directly sanctioned Russian gas. Instead, it set a non-binding target of 2027 for member countries to stop importing Russian gas. Oil and natural gas exports and related tax revenues are the Kremlin’s single most important source of cash.

Austria became the first Western European country to import gas from the Soviet Union in 1968, and its dependence on Russian energy increased in the following years. During Russian President Vladimir Putin’s visit to Austria in 2018, an agreement was signed between Gazprom President Alexey Miller and Rainer Seele, then Chairman of OMV, to extend natural gas supplies to Austria until 2040. The contract obliges the Austrian side to pay for the gas whether it is delivered or not.

Gewessler convened a commission to investigate the conditions under which the agreement was signed and the legal possibilities of getting rid of it.

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McHugh reported from Frankfurt, Germany.