The WAG Loop project stands as an essential measure safeguarding both local and European energy security. Given the current geopolitical landscape and the imminent expiry of the transport contracts between Rus-sia and Ukraine at the end of 2024, there is a risk of a gas shortage for Austria and the Southeast Eu-ropean region. In an initial step (WAG Loop 1 project), the approximately 40-kilometre section from Oberkappel to Bad Leonfelden is to be extended by a parallel pipeline in addition to the existing pipe-line. This additional pipeline would increase the transport capacity from Germany by about 30% or 27 TWh per year and thus provide better access to gas sources in North-West Europe (e.g. Norway and LNG along the coast in Germany, Belgium, the Netherlands and France). In addition, climate-friendly hydrogen could be transported over the new pipeline in the future. The WAG Loop project not only makes a significant contribution to domestic security of supply, but also sets the stage for a green, sustainable future.
 

Planning for the WAG Loop 1 project began immediately after the war. It was then presented to the Ministry of Climate Action and Energy’s Gas Summit on 22 June 2022 and subsequently included in the Grid Development Plan. The coordinated grid development plan was officially approved by E-Control in the summer of 2023. Immediately thereafter, Gas Connect Austria started the implementation of the project and has been pursuing it consistently ever since. E-Control and the ministries involved are well aware of the project and its timetable. Important steps have already been taken, including a feasibility study to determine the optimal route, the identification of protection zones or assets along the route, and discussions with relevant stakeholders such as suppliers, political actors and engineering partners. GCA has also received written letters of support or expressions of interest from a number of stakeholders. In addition, we are currently working on the Environmental Impact Statement (UVE), which will form the basis of the Environmental Impact Assessment (UVP).

If faster implementation were desired, as is the case for gas infrastructure projects in Germany, for example, acceleration laws would have to be created. Such laws are not being discussed in Austria. The current and rather ambitious project plan envisages completion by 2027.

The next key milestones are the clarification of the overall financing of the project and the clarification of state aid law.

The next step is to check whether the provision of funds is unobjectionable under state aid law. Once this has been approved, the financing can be clarified and the decision on the FID can be made on this basis.

Austria has an annual natural gas demand of around 90 TWh (in 2022 it was approximately 88 TWh),which currently and primarly originates from Ukraine and the Baumgarten hub, as well as from Western Austria. In case of a cease of the natural gas flow through Ukraine, the following alternative routes would need to take over the supply: the Trans-Austria-Gas Pipeline (TAG) from Italy, which could currently carry about 70 TWh in reverse flow, and the West-Austria-Gas Pipeline (WAG), which already has a reverse flow capacity (from Germany to Austria) of about 90 TWh per year, making it a total 160 TWh. Additionally, there is the volume of Austrian gas storage facilities, where approximately 90 TWh can be stored when fully filled, with about half of that available to Austria. In addition, the expansion or establishment of LNG terminals could also enble new supply routes from the north or southeast.

Austria is embedded in a European gas network, which means that it can also be supplied via alternative routes. The European Commission's Security of Supply Regulation (SoS Regulation) stipulates that neighbouring member states must help each other in the event of a supply crisis. A solidarity mechanism stipulates that vulnerable customers must also be supplied across borders. So if there are extreme weather conditions (very cold, low water levels, little wind and sun for alternative energy production), storage reserves are already depleted and neighbouring countries also need to be supplied, it may be that the capacity currently available is not sufficient. In such an extreme case such as a gas shortage, the market would initially react with a significant increase in the price of gas (probably to a multiple of the normal price). The resulting additional costs to be borne by gas consumers would quickly exceed the current cost of WAG Loop 1 (around EUR 200 million). It therefore makes sense to expand the capacity of the WAG now and as a precautionary measure. The WAG Loop will help to avoid bottlenecks and price increases in extreme cases by increasing capacity in the west-east direction. In addition, the pipeline can also be used for hydrogen transport in the future.

The project is currently scheduled for completion in early to mid-2027. Gas Connect Austria is taking significant measures to meet this ambitious timeframe and facilitate swift implementation. However, the realisation of the project is also subject to numerous external factors that are beyond our control, including approval procedures, environmental impact assessments, negotiations for rights of way, and supplier availability and lead times. Austria does not have a law similar to the one in Germany that allows for accelerated construction of critical infrastructure.

Some parties are considering accelerating the WAG Loop 1 project and completing it by the first quarter of 2025. However, this is not feasible whilst adhering to the given framework conditions.

Gas Connect Austria immediately initiated the WAG Loop 1 project following its integration into E-Control’s long-term planning and has since been diligently working on the project, thus taking proactive measures.

From GCA's experience with other pipeline projects, it is unrealistic, as demanded by some, to complete the project by the first quarter of 2025. The necessary regulatory approval process alone takes at least one year. Prior to that, as part of the Environmental Impact Statement (UVE), approximately two vegetation periods are required to survey protected assets. Even with an extremely ambitious approach, the production and laying of steel pipes do not anticipate completion before the end of 2026.

A comparison in terms of timing with the construction of an LNG pipeline in Germany is also flawed since Germany specifically enacted the LNG Acceleration Act for its expansion, which includes exemptions for the Environmental Impact Assessment procedure (UVP), nature conservation laws, and similar regulations. Such measures were not initiated by the Austrian Ministry.

Gas Connect Austria operates independently from its owners when it comes to project design and financing, in compliance with unbundling regulations.
 

There is currently no delay in the WAG Loop – because, despite the current finalisation of the financing, GCA has been pursuing the WAG Loop from the beginning as if the outstanding final investment decision had already been made. Therefore, there will be no delay due to the financing! If, in exceptional cases (the last ones were 15 years ago), a compulsory granting of the servitude for the gas pipeline becomes necessary, a delay of several months cannot be ruled out.

As mentioned elsewhere, there are already diversified transport routes for gas supply. However, Gas Connect Austria has also made provisions for imports from the west. We have implemented temporary safeguards and reinforcements on the existing pipeline, which already allow us to transport higher volumes in an emergency, roughly in line with the expansion plans. This will ensure security of supply during the construction phase of the project

The idea of laying a 110kV line in the Mühlviertel as an underground cable was evaluated years ago (link to regional conferences, pilot project: electricity supply). The result was that Netze Oberösterreich chose the option of an overhead line for the construction of this 110kV line and also (only) submitted and pursued this as a project. There is therefore no ‘110kV underground cable project’ in the Mühlviertel region with which GCA could hold any discussions on expert details (distances, compliance with standards, etc.).

GCA has always stated that it is open regarding an underground cable project and possible synergies, but has always emphasised that this must not lead to any delays for the gas pipeline and that the ambitious schedule to ensure security of supply has top priority.

To date, there is no ‘underground cable project’. If such a project should arise during the construction phase of the gas pipeline, GCA is - as always - open to discussions and possible cooperation during construction, as long as this does not delay the process.