Deadlock with Russia over Nord Stream gas turbine not our fault, says Siemens Energy CEO

Siemens Energy CEO Christian Bruch said on Monday that Russia has no technical justification for denying it the delivery of a turbine for the key Nord Stream 1 gas pipeline.

His comments come amid a standoff between Germany and Russia over a piece of equipment that the Kremlin claims is cutting off gas supplies to Europe.

Germany’s Siemens Energy, which supplies equipment to the power industry, said it was ready to return the turbine to Russia after undergoing maintenance work in Canada.

However, Moscow says economic sanctions imposed by Canada, the European Union and Britain after the Kremlin’s invasion of Ukraine will prevent the turbine from being shipped back. Russia says it needs documentation to confirm the turbine is not subject to Western sanctions.

Germany has disputed this reasoning, saying the equipment is not affected by the sanctions and accusing Russia of not honoring its agreements for political reasons.

Russia recently cut gas supplies to Europe to a fifth of its capacity through the Nord Stream 1 pipeline, the EU’s single largest gas infrastructure.

It is not yet known if or when Nord Stream 1 gas flows will return to normal levels.

German Chancellor Olaf Scholz says Russia is responsible for blocking turbine deliveries needed to keep gas flowing to Europe.

Sascha Schurman | Afp | Getty Images

“It’s probably one of the world’s most famous turbines,” Bruch told CNBC’s “Squawk Box Europe” on Monday, after the company warned of deep net losses on the Russia restructuring.

“Why is this necessary? What we’re doing here is the normal course of maintenance. So, you have six units installed in Russia, five are operating normally, and then you have a spare unit that rotates around the world between the maintenance center and operations – and that’s one unit waiting for Gazprom,” Bruch said.

“It’s still in Germany, and we’ve prepared all the import papers for Russia, but we still need some import information from the Russian client, which hasn’t happened yet,” he said.

Bruch said Siemens Energy is talking to Gazprom every day, but the turbine has not yet been cleared for shipping.

Gazprom was not immediately available for comment when contacted by CNBC.

‘There may be other reasons’

“As we have always said and I can underline it, we cannot reconcile the direct effects between this one spare turbine and the reduction in gas supply, but this is really a matter for Gazprom as a customer. So far, we [do] We still don’t have a clear time to ship the turbine to Russia,” Bruch said.

The turbine will be swapped out in September, he said, “so nothing in terms of delays yet. And there [are] Obviously other turbines are expected to be overhauled but we have no major announcement yet of any outage from operations. And that is why I cannot reconcile the technical reason for the gas supply.”

“There could be other reasons – and here I can’t really comment,” he said.

Some energy analysts have suggested that Russia may be using the deadlock on the turbine as a pretext to turn off better gas supplies to Europe.

— CNBC’s Jenny Reid contributed to this report.

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