Siemens Energy CEO Christian Bruch said on Monday there was no technical justification for Russia to refuse delivery of a turbine for the key Nord Stream 1 gas pipeline.
His comments come amid a standoff between Germany and Russia over equipment that the Kremlin says is stunting gas supplies to Europe.
Germany’s Siemens Energy, which supplies equipment to the power industry, says it is ready to return the turbine to Russia after carrying out maintenance work in Canada.
Moscow, however, says economic sanctions imposed by Canada, the European Union and Britain following the Kremlin assault in Ukraine prevented the turbine from being returned. Russia says it needs documents to confirm the turbine is not subject to Western sanctions.
Germany disputed this reasoning, saying the equipment was not subject to the sanctions and accusing Russia of not honoring its contracts for political reasons.
Russia recently cut gas supplies to Europe through the Nord Stream 1 gas pipeline, the EU’s largest gas infrastructure, to just a fifth of its capacity. Moscow has repeatedly denied that it is weaponizing fossil fuel supplies.
It is not yet known when or if Nord Stream 1 gas flows will return to normal levels.
German Chancellor Olaf Scholz said Russia was responsible for blocking delivery of the turbine it needed to get gas to Europe.
Sascha Schuerman | AFP | Getty Images
“It’s probably one of the most famous turbines in the world,” Bruch told CNBC’s “Squawk Box Europe” on Monday, as the company warned of a bigger net loss on Russia’s restructuring.
“Why is that necessary? It’s a normal course of maintenance, what we’re doing here. So you have six units installed in Russia, five are working normally, and then you have a spare unit that’s been circling the globe between the maintenance center and operations – and this is the only unit that Gazprom is waiting for,” Bruch said.
“It is still in Germany, and we have prepared all the import documents to Russia, but obviously we need some import information from the Russian client which has not yet taken place,” he said. he adds.
Bruch said Siemens Energy was talking daily with Gazprom, but the turbine had not yet been cleared for shipment.
Gazprom was not immediately available for comment when contacted by CNBC.
“There could be other reasons”
“As we have always said and I can only stress, we cannot reconcile the direct consequences between this spare turbine and the gas supply being cut off, but it is really something that belongs to Gazprom as a customer.So far, we [do] we don’t yet have a specific date for shipping the turbine to Russia,” Bruch said.
He added that the turbine should be exchanged in September, “so there is nothing in terms of delay yet. And there [are] obviously other turbines should also be overhauled, but we still don’t have any major operating failure announcements. And that’s why I can’t reconcile a technical reason with the supply of gas.”
“There could be other reasons – and that’s where I can’t really comment,” he added.
Some energy analysts have suggested that Russia could use the turbine standoff as a pretext to permanently cut off gas supplies to Europe.
– CNBC’s Jenni Reid contributed to this report.