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Canada Cancels Sanctions Exemption For Russian Gas Turbine

Canada has canceled an exemption from sanctions against Russia that it granted earlier this year to a company that repairs gas turbines for Russia’s Gazprom.

According to a joint statement by resource minister Jonathan Wilkinson and foreign minister Melanie Joly, the cancellation followed Gazprom’s failure to return the Nord Stream 1 pipeline to normal operating capacity after the Canadian government granted an exemption for the company that repaired its turbine.

The statement marks the latest chapter in what became a whole saga that began earlier this year when Germany’s Siemens, which was in charge of Gazprom’s turbine maintenance, sent the turbine to the Canadian company.

Canada picked the moment when the turbine was due to be returned to its compressor station to issue new sanctions against Russia, which effectively stranded the turbine in Canada. In response, Russia reduced gas flows along Nord Stream 1 on the grounds it cannot maintain full flows with fewer than normal turbines.

After some diplomatic discussions between Canada and Germany, which received most of the gas from Nord Stream 1, Ottawa agreed to issue an exemption for the company that repaired the piece of equipment and it was shipped to Germany.

This was where it got stranded again because Siemens and Gazprom could not agree on all the documentation that needed to change hands before the turbine was returned in the context of the EU sanctions against Moscow. Flows along Nord Stream 1 continued to decline.

The return of the turbine lost relevance after the bombing of the Nord Stream 1 and Nord Stream pipelines this summer, which rendered the former unusable without extensive repairs.

As a result of all these developments, the two Canadian ministers said in their statement, the government of Canada had decided to revoke the sanction exemption after consultations with its partners in Europe and Ukraine.


By Irina Slav for Oilprice.com

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