Gazprom, Siemens Spar Over Turbine Maintenance Slowing Gas Flows

Gazprom PJSC has signaled more problems are possible with Nord Stream gas turbines, amid its spat with Siemens Energy AG over equipment maintenance, which the German company said should be a routine operation.

Gas traders have been closely monitoring the developments over Nord Stream turbines since mid-June, when Russia’s gas giant reduced flows via the major export pipeline to Europe. On Wednesday, gas prices spiked as much as 14% after supplies through the link fell to just 20% of capacity, after the Russian producer said another turbine needed to be taken down for maintenance.

The Portovaya compressor station, the entry point of Nord Stream on Russia’s side, needs five functioning turbines to run at full capacity, with one more that is operational to provide backup, Gazprom Deputy Chief Executive Officer Vitaly Markelov told state Rossiya 24 TV.

As of today, there is only one gas compressor unit “in working condition” at Portovaya, while turbines at other units require planned maintenance or repairs and can’t be used as their conditions do not meet the necessary Russian regulatory standards, according to Markelov.

Responding directly to Markelov’s comments, Siemens Energy said that it hasn’t received any damage reports from Gazprom and therefore assumes that the turbines are operating normally.

“For us, the maintenance of the turbines is a routine operation that has proven itself in practice over many years,” the company said in a statement, adding that it has no access to the equipment at this point.

Any future maintenance work can be facilitated because the turbines can be shipped from Canada, where they are maintained, to Germany, the company said.

Sanction Strain

Gazprom expected to receive one repaired turbine, following maintenance in Canada, in May but Siemens Energy failed to deliver it amid western sanctions, Markelov said. The turbine taken down earlier this week is currently at Portovaya and also needs to be serviced, he added. “Siemens doesn’t do the required work to resolve the issues,” Markelov said.

Siemens Energy has reiterated that Canada already permitted the turbine move to Germany. “At this point in time, we thus see no link between the turbine and the gas cuts that have been implemented or announced,” it said in a statement Monday.

The Kremlin is likely to keep vital gas flows to Europe at minimal levels as long as the standoff over Ukraine continues, ramping up pressure on the European Union over its stance on Russia’s invasion of Ukraine, Bloomberg reported earlier this week, citing people familiar with the leadership’s thinking.

It’s “wrong” to link the current reduction in gas flows to Europe to pressure on the EU, Kremlin spokesman Dmitry Peskov told reporters on his Wednesday conference call. Gazprom “is supplying as much gas as necessary and as much as possible” amid technical issues, he said.

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