Gas exports from Russia have faced serious problems due to US sanctions imposed in February, which prohibit the supply of any gas turbines and components to Russia. The critical dependence of Russian gas megaprojects, including the Power of Siberia and Turkish Stream, on Western technologies and the inability to quickly replace them may lead to a reduction in gas exports to the last major consumers – China and Turkey. Problems with the maintenance of existing gas pipelines and the implementation of future projects were recognized by market participants in a conversation with Kommersant.
The publication notes that until February 2023, American components entered the Russian market, despite diplomatic differences and the sanctions war. However, with the new package of sanctions, this flow has stopped. At the same time, the success of the commissioning and operation of Russia's largest export megaprojects, the Power of Siberia and Turkish Stream gas pipelines, which use technology from the American company Baker Hughes, depends on American components.
The February package introduced a ban not only on direct deliveries, but also on indirect ones, including re-exports. That is, now even a foreign partner who subsequently transfers turbines or components to them to Russian citizens or Russian legal entities will fall under secondary sanctions. Ekaterina Makeeva, partner and head of sanctions practice at A-PRO JSB, notes that the February sanctions impose a preventive ban on the supply of such equipment and components, and it will be almost impossible to obtain permission for the supply.
True, one of the sources of the publication is not inclined to dramatize the situation so much. According to him, the ban is not complete, but the new requirements "create some uncertainty regarding the interpretation of sanctions."
The publication recalls that supply problems began almost immediately after Russia's full-scale invasion of Ukraine. The world's largest suppliers of gas turbines – the American Baker Hughes and the German Siemens – promptly announced their withdrawal from Russia and the suspension of cooperation. Baker Hughes, for example, stopped servicing the Yamal LNG projects of Novatek and Gazprom's Sakhalin-2, and also shipped only part of the gas turbines for Novatek's Arctic LNG-2 project under construction. However, until February, the supply of components continued, the newspaper notes.
Against the background of deprivation of access to Western technologies, Russian companies are trying to find an alternative in China or Iran, but so far this has not been successful. Against this background, companies are even forced to resort to the secondary market, looking closely at parts and turbines that have already been used before. Russia's own developments in the field of gas turbine production cannot yet be called successful. Active import substitution in this area began after the scandal with Siemens turbines in 2017, which were planned to be used in Crimea, which would be considered a violation of Western sanctions. Then Russia had to start developing its own turbines, but the Russian companies Rostec and Silmash have not yet provided a single working unit.
The problem is compounded by the fact that some Russian power plants use Western turbines. There are similar power units at separate stations – from the Yuzhno-Sakhalinskaya CHPP-1 of RusHydro to the Surgutskaya GRES-2 of Unipro. These projects may also run into problems due to new US sanctions. Lawyers interviewed by the publication note that Russia is unlikely to be able to re-export turbines and components from neighboring countries – China, Armenia, Turkey, Uzbekistan and others that are still actively cooperating with Russia. Experts believe that the United States will tighten its control over the supply of its technologies through third countries and will begin to impose secondary sanctions.