Russian gas giant Gazprom has insisted that it will be unable to grow its gas shipments to Europe via subsea Nord Stream 1 pipeline in the coming months unless Germany’s Siemens rethinks a decision to exit Russia and western states remove sanctions on imports of high-tech equipment into the country.
Speaking to state run television channel Rossiya24 in Moscow, Gazprom deputy executive board chairman Vitaly Markelov said the ball is now on the side of company’s “foreign partners” to fix issues with eight gas-fired turbines.
Just a single one of these turbines, that were supplied and maintained by Germany’s Siemens Energy, is currently in operation at the Portovaya pumping station on the Baltic Sea coast near the Russian town of Vyborg.
Markelov said the turbine is driving a compressor pump that enables exports of about 33 million cubic metres per day of gas into Nord Stream 1, against the nameplate capacity of the system that is close to 170 MMcmd.
Of the remaining seven turbines, according to Markelov, the one with serial number 073, has not yet been returned from Germany after being serviced in Canada.
Markelov said Gazprom is refusing to take delivery of this unit, fearing risks that sanctions may be imposed directly on the company after the shipment arrives in Russia, and bureaucratic disagreements with Siemens Energy.
Three units, identified with numbers 072, 074 and 121, have been shut down in anticipation of the overhaul, that is due after 34 months in operation, he said.
Meanwhile, the remaining three turbines — numbers 075, 076 and 120 — cannot be operated because of technical faults and breakdowns that the station’s operator, Gazprom Transgaz Sankt Petersburg, has been unable to repair without the presence of Siemens Energy.
Markelov said the operator had to halt these three turbines at the end of June after they were reported to have developed 11 malfunctions in the period between May and June.
He added that under the contract between the operator and Siemens Energy, repairs on the turbines can only be conducted in the presence of Siemens’ representatives. However, despite several letters sent to Siemens in Russia in June and July, nobody from the German company arrived to Portovaya to advise and supervise repairs.
In May, Siemens — which holds a key minority shareholding in Siemens Energy — said it would “exit the Russian market as a result of the Ukraine war. The company has started proceedings to wind down its industrial operations and all industrial business activities”.
Meanwhile, Siemens Energy separately said it was complying with all sanctions and has stopped any new business in Russia.
In response to Upstream, Siemens Energy's spokesperson said: "Every day, there is some new reason why the gas allegedly can not be delivered."
The spokesperson reiterated that nothing has changed from last week when the company said: "We currently have no access to the turbines on site and we have not received any further damage reports from Gazprom so far. Therefore, we have to assume that the turbines are operating normally."
According to Markelov, sanctions are preventing the Portovaya operator from sending idled turbines numbered 072, 074 and 121 to Canada for overhauling as the company remains uncertain as to whether they will be allowed back to Russia.
Of these three units, turbine number 072 had been removed from the pumping assembly at Portovaya and was ready for the journey to Canada back in April. However the unit never left Russia, Markelov said.
No search for alternatives
With just one compressor in operation at Portovaya, industry analysts point out that gas giant Gazprom has not been making efforts to use alternative export routes to Europe to fulfil its export commitments to European customers.
Instead, over the weekend, the company said that it halted gas supplies to Latvia after it had discovered unspecified violations in terms of the short-term delivery contract for July.
Meanwhile, Ukraine’s gas transmission authority Operator GTS Ukrainy last week reiterated that Gazprom has an unused option to ship up to an additional 203 MMcmd of gas via the country’s pipeline network to Europe.
Declining gas exports to Europe this year have taken their toll on Gazprom’s production that fell by 12% to just over 262 billion cubic metres of gas in the period between January and July this year.
Exports to countries outside the former Soviet Union area, including Europe, declined by 35% or 40 Bcm, to 75.3 Bcm, in this period, the company said.
Although Gazprom said gas exports to China rose by 61% year on year, analysts reminded that a dedicated pipeline from East Siberia to China is not connected to the Russian trunkline network, and thus can not help Gazprom to divert gas to the country from European markets.
* This story was amended to include a statement from Siemens Energy.
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