Russia's Gazprom formally requests Siemens for turbine release documentation

Russia's state-controlled Gazprom has formally requested that Germany's Siemens provide documentation to show it is possible to return to Russia a key turbine for the Nord Stream gas pipeline, Gazprom said July 16.

Canada has granted a "time-limited and revocable" permit for Siemens Canada to allow the return of repaired Nord Stream turbines to Germany, but Gazprom has said it has not yet seen documentation confirming the decision.

The European gas market has been closely monitoring activity around the turbine after Gazprom cut flows via Nord Stream to just 40% of capacity in mid-June, citing the delay in the return of the turbine to the Portovaya compressor station and other technical issues.

"On July 15, Gazprom formally approached Siemens with a request to provide documents that, taking into account the current sanction regimes imposed by Canada and the EU, would be necessary for transferring back to Russia the gas turbine engine for the Portovaya compressor station," Gazprom said.

Gazprom said it had also formally requested that Siemens fulfill its obligations on repair and maintenance of gas turbine engines, which it said were "essential for the reliable operation of the Nord Stream gas pipeline and gas supplies to European consumers."

Siemens declined to comment on the requests when contacted by S&P Global Commodity Insights on July 18.

On July 13, the German company said it hoped to return the one turbine that was currently in Canada "as quickly as possible" after the sanctions waiver was approved.

It remains to be seen when the turbine will become operational again. However, Nord Stream in any case entered its annual maintenance shutdown on July 11, which is scheduled to last until July 21, with no gas flowing during the work.

There are, however, fears the pipeline may not restart at all following the work given recent Russian gas supply behavior.

Nonetheless, Kremlin spokesman Dmitry Peskov on July 8 said the return of the turbine from Canada would enable Russia to increase gas flows through Nord Stream.

Low flows, high prices

Uncertainty over Nord Stream supplies has helped keep European gas prices at sustained highs and close to the record levels seen in March in the immediate aftermath of Russia's invasion of Ukraine.

The benchmark Dutch TTF month-ahead price hit a record Eur212.15/MWh on March 8, according to Platts price assessments by S&P Global Commodity Insights, and was last assessed at Eur159.50/MWh on July 15, up by 86% since the start of 2022.

Gazprom first flagged issues with Nord Stream flows on June 14 when it said it would cap supplies at 100 million cu m/d -- down from planned deliveries of 167 million cu m/d.

It said this was because Siemens had not returned the turbine that had been in Montreal for maintenance and also because of other technical issues.

In response, Siemens said June 14 that Canadian sanctions imposed on Russia meant it was unable to return the turbine.

Gazprom said at the time that there were only three operational gas compressor units at Portovaya.

Then on June 15, the Russian company said it had halted the operation of another Siemens gas turbine at Portovaya, limiting flows in Nord Stream to just 67 million cu m/d.

This, it said, was due to the time between maintenance periods having lapsed and was in accordance with instructions from the regulator Rostekhnadzor.