Austria serious about domestic gas and is pulling out all the stops

• Europe’s gas crunch has made securing domestic supplies more critical than ever
• Austria has demonstrated its interest by overturning objections brought by NGOs
• Domestic gas is cheaper and generates a lot less emissions

As much as the European Union would like to make a clean break from fossil fuels, the fact remains that they make up a large chunk of its electricity generation – about 29.2% in 2024.

Natural gas in particular is valuable due to its use in both baseload power and peaking power to firm up the grid.

However, Europe can’t produce all the gas it needs and for a long while was reliant on relatively inexpensive supply from Russia.

The bloc was quickly forced to diversify following Russia’s invasion of Ukraine, with liquefied natural gas imported from the US and Qatar emerging as reliable if significantly more expensive alternatives.

Since then, mild winters have allowed the EU to build up gas stockpiles to insulate against sudden demand surges, which has led to a moderation in gas prices.

However, all it takes is a cold winter – like in early 2025 – to quickly deplete that storage and send prices soaring.

The case for domestic gas

Pricing is certainly one reason for European countries to push for greater domestic gas production.

Having domestic gas production will mean lower costs compared to importing LNG while ensuring a greater degree of energy security.

Another reason for increasing domestic production of natural gas is that it generates less emissions than importing liquefied natural gas sourced from the US or other countries.

Research carried out by Wood Mackenzie found the UK could boost North Sea oil and gas production while remaining within the strictest international climate pathways.

Its analysis found that every additional trillion cubic feet of gas produced in the UK Continental Shelf (UKCS) could deliver Scope 1 and 2 emissions savings of 14.6 million tonnes of carbon dioxide equivalent when displacing US LNG imports.

While the study was focused on the UK, its findings are nonetheless relevant for the rest of Europe in one key sense.

That is to say that every bit of gas produced within gas-hungry Europe – or Austria in particular – will generate significantly less emissions than importing the same amount of LNG from the US.

ADX Energy (ASX:ADX) executive chairman Ian Tchacos told Stockhead the liquefied natural gas imported from the US into Europe would generate about 150kg of carbon dioxide per barrel of oil equivalent, while domestic gas would have just 20kg of CO2 for the same quantity.

This difference accounts for the emissions generated by fracture stimulation, liquefaction of the gas and transporting LNG to Europe.

“Gas prices in Europe are generally about three, mostly around four times, the price of domestic gas in America and probably equivalent now to the high prices we get on the East Coast,” he adds.

“And because LNG is really the buffer supply, then the cost of domestic gas in Europe, including Austria, is very much driven by the price of LNG.”

Austrian push

Demand has fallen steadily since 2021, but gas still makes up 19.6% of Austria’s energy needs.

It has never been a major gas producer, rather being a big importer of gas from Russia that it subsequently piped to surrounding countries. However, permitting processes there have been among the best in Europe.

Domestic production makes up just 7.7% of its needs and has continued to decline, falling 71% in the period from 2000 to 2024.

The end of Russian imports also led to the shut down of Austrian industries reliant on low-cost gas.

This implies that Austria will still need significant volumes of gas for some time and while LNG imports can certainly meet its needs, there are numerous advantages to developing domestic supplies.

Tchacos highlighted Austria’s push for more domestic gas by noting that objections brought about by two non-governmental organisations to ADX’s Welchau drilling and test operations were overturned based on public interest.

“That’s basically because of the importance of domestic gas, both in terms of the economy, but also strategically,” he added.

Welchau-1 intersected four intervals with oil and gas indications but was only able to test one interval before the NGOs filed their objections.

ADX is preparing to resume oil and gas testing of three remaining intervals at its Welchau-1 discovery well with fluid sampling of the Reifling formation that was perforated prior to suspension being the first task on the list.

The discovery has a best estimate prospective resource of 46 million barrels of oil equivalent.

More immediate gas production might come from the shallow gas prospects it plans to drill in Upper Austria with the first – GOLD-1 in the ADX-AT-II licence – scheduled to spud in the first quarter of 2026.

GOLD-1 is one of seven shallow gas prospects identified by the company as having high expected success rates, with comparable 3D seismic signatures to historical gas discoveries encountered across the basin.

Other potential gas targets in the country include the Welchau Deep gas prospect and four gas-condensate prospects in the Sub-Flysch Play.

At Stockhead, we tell it like it is. While ADX Energy is a Stockhead advertiser, it did not sponsor this article.