Gazprom blames sanctions on key turbine for limiting gas flow to Europe
Gazprom said on Wednesday that Western sanctions had made it “impossible” to deliver a turbine crucial to Russia’s gas supply to Europe, indicating that Russia’s state gas monopoly would not increase flows until a likely energy crisis later this year.
Russia blames the punitive measures for preventing the return of the turbine made by Siemens, which Gazprom says is forcing it to limit gas deliveries through the Nord Stream 1 pipeline.
Earlier Wednesday, German Chancellor Olaf Scholz blamed delays in the turbine deployment on Russia, accusing it of failing to take delivery of the equipment.
“It is obvious that nothing – absolutely nothing – is opposed to this turbine being transported to Russia and installed there,” he said.
Gazprom cut gas flows through NS1 to 60% capacity in mid-June, then cut them further to 20% last week as the dispute over turbines dragged on.
The company said on Thursday that Canadian, UK and European sanctions “and the gap between the current situation and Siemens’ contractual obligations” meant the turbine could not be delivered.
Dmitry Peskov, spokesman for Russian President Vladimir Putin, said Russia wanted guarantees that the UK branch of Siemens would not shut down the turbine remotely and that Canada would return any turbines sent there for repair.
Scholz made his remarks as he stood next to the turbine in the center of the row – an unusual intervention intended to show the German public that nothing was stopping Gazprom from taking delivery of the kit.
The turbine was undergoing maintenance in Canada, but the Canadian government initially refused to send it back to Russia, citing the sanctions regime it had imposed on the Kremlin over Ukraine. Ottawa then relented after Scholz asked them to exempt the kit from sanctions.
“What is important is to make it clear that this turbine can be deployed and used at any time,” Scholz said during his visit to the Siemens Energy plant in Mülheim an der Ruhr. “There is nothing mystical here. . . The turbine is there, it can be delivered, someone just has to say they would like to have it.
Christian Bruch, managing director of Siemens Energy, which made the turbine, said Gazprom had no justification for blaming the throttling of gas flows via Nord Stream 1 on the absence of the turbine.
European officials have criticized Russia for ‘weaponising’ gas supplies, saying that although there was a real problem with the turbines – which they dispute – Gazprom has refused to use alternative pipeline routes that have sufficient capacity to fill the gap on Nord Stream 1
Tom Marzec-Manser, an analyst at ICIS, said while most in the industry viewed the turbine problem as a Russian-made distraction, Gazprom said volumes on the line would not exceed 20% and could fall further. .
“Russia claims there is only one serviceable turbine left for NS1, which at some point in the near future will have to (or will be expected to have to) go offline for its own maintenance,” Marzec-Manser said. “At that time, the flows on the line to Germany could drop to zero.”
The German Chancellor also said it might make ‘sense’ to extend the life of Germany’s last nuclear power plants as reduced gas flows from Russia raise the prospect of a winter energy crisis in the greater economy of Europe.
Scholz said the three plants due to close at the end of this year represent only a “small proportion” of Germany’s total power capacity. “But it might still make sense” to let them run longer, he added.
Scholz said authorities would “draw our conclusions” from a stress test of the German power system currently underway and then decide what to do.
The question of whether Germany should continue to operate its nuclear power plants has become a huge bone of contention among the country’s three ruling coalition parties.
The smallest of the three, the Liberal Free Democrats, want factories to run longer while Scholz’s Social Democrats and the Greens oppose it.
But Scholz said an overhaul was underway in government. He hinted that some German states, such as Bavaria, might need to let their nuclear power plants run longer because they had fallen behind in building wind farms and new power grids. “And we have to take that into account,” he said.
Additional reporting by David Sheppard in London