Gazprom blames sanctions on key turbine for limiting gas flow to Europe

Gazprom said on Wednesday that western sanctions had made the delivery of a turbine crucial for Russian gas supplies to Europe “impossible”, in an indication the Russian state-run gas monopoly would not increase flows ahead of a likely energy crunch later this year.

Russia blames the punitive measures for preventing the return of the Siemens-manufactured turbine, which Gazprom has claimed is forcing it to limit gas deliveries via the Nord Stream 1 pipeline.

German chancellor Olaf Scholz earlier on Wednesday laid the blame for delays in the deployment of the turbine on Russia, accusing it of failing to take delivery of the equipment.

“It’s obvious that nothing — absolutely nothing — stands in the way of this turbine being transported to Russia and installed there,” he said.

Gazprom slashed gas flows through NS1 to 60 per cent of capacity in mid-June, then cut them further to 20 per cent last week as the turbine dispute dragged on.

The company said on Thursday that Canadian, UK and EU sanctions “and the discrepancy between the situation at hand and Siemens’ contractual obligations” meant the turbine could not be delivered.

Dmitry Peskov, Russian president Vladimir Putin’s spokesman, said Russia wanted guarantees that Siemens’ UK arm would not shut off the turbine remotely and that Canada would return any turbines sent there for repairs.

Scholz made his remarks while standing next to the turbine at the centre of the row — an unusual intervention designed to show the German public there was nothing stopping Gazprom taking delivery of the kit.

The turbine had been undergoing maintenance in Canada, but the Canadian government initially refused to send it back to Russia, citing the sanctions regime it imposed on the Kremlin over Ukraine. Ottawa later relented after Scholz asked it to exempt the kit from the sanctions.

“What’s important is to make clear that this turbine can be deployed and used at any time,” Scholz said during his visit to the Siemens Energy plant at Mülheim an der Ruhr. “There’s nothing mystical going on here . . . The turbine is there, it can be delivered, someone just has to say they’d like to have it.”

Christian Bruch, chief executive of Siemens Energy, which made the turbine, said Gazprom had no justification for blaming the throttling back of gas flows through Nord Stream 1 on the absence of the turbine.

European officials have criticised Russia for “weaponising” gas supplies arguing that even if there was a genuine issue with the turbines — which they dispute — Gazprom has declined to utilise alternative pipeline routes that have ample capacity to make up the shortfall on Nord Stream 1

Tom Marzec-Manser, an analyst at ICIS, said that while most people in the industry viewed the turbine issue as a Russian-manufactured distraction, Gazprom was indicating that volumes on the line would not rise above 20 per cent and could fall further.

“Russia is claiming that there is only one operable turbine left for NS1, which at some point in the near future will need (or be said to need) to come offline for its own maintenance,” Marzec-Manser said. “At that point flows on the line to Germany could drop to zero.”

Germany’s 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 crunch in Europe’s largest economy.

Scholz said the three plants due to close at the end of this year only accounted for a “small proportion” of Germany’s total electricity capacity. “But still it might make sense” to let them run for longer, he added.

Scholz said authorities would “draw our conclusions” from a stress test of the German electricity system that is currently being conducted and then decide what to do.

The question of whether Germany should continue to operate its nuclear power stations has become a huge bone of contention between the three parties in the country’s ruling coalition.

The smallest of the three, the liberal Free Democrats, want the plants to run for longer while Scholz’s Social Democrats and the Greens are opposed.

But Scholz indicated that a rethink was under way in the government. He hinted that some German states, such as Bavaria, might need to let their nuclear stations operate for longer because they had lagged behind in building wind farms and new electricity networks. “And we have to take that into consideration,” he said.

Additional reporting by David Sheppard in London