Russian gas exports are in danger because of US Due to US sanctions put in place in February that forbid the supply of any gas turbines and related parts to Russia, gas exports from that country are currently experiencing serious difficulties. Gas exports to Russia’s last two major consumers, China and Turkey, may decline due to the country’s critical reliance on Western technologies for its gas megaprojects, such as the Power of Siberia and the Turkish Stream, and the inability to quickly replace them. Market participants acknowledged issues with the upkeep of current gas pipelines and the implementation of future projects in a conversation with the Russian newspaper Kommersant.
The article points out that despite diplomatic disputes and the sanctions war, American components entered the Russian market up until February 2023. The new set of sanctions, however, has stopped this flow. The Power of Siberia and Turkish Stream gas pipelines, which employ the technologies of the American company Baker Hughes, are Russia’s largest export megaprojects, and the commissioning and operation of these projects depend on these American components.
Washington included a ban on all turbine deliveries, direct and indirect, including re-export, in the February package. Now, secondary sanctions will apply if a foreign company subsequently transfers turbines or components for them to Russian citizens or Russian legal entities. The February sanctions introduce a preventive ban on the supply of such equipment and components, and Ekaterina Makeeva, Partner and Head of the Russian law firm A-PRO that specializes in sanctions locicies, notes that it will be nearly impossible to obtain permission for their supply.
One of the publication’s sources, though, is less inclined to exaggerate the circumstances. This is not a complete ban, he claims, but the new specifications.According to the article, the supply issues started almost right away after Russia’s full-scale invasion of Ukraine. The two biggest gas turbine manufacturers in the world, American Baker Hughes and German Siemens, swiftly declared their withdrawal from Russia and the suspension of all cooperation. For instance, Baker Hughes stopped providing maintenance for Novatek’s Arctic LNG-2 project that is currently under construction as well as Gazprom’s Sakhalin-2 and Yamal LNG projects. The newspaper does mention that the supply of components continued up until February.
Currently, Iranian or Chinese suppliers are being sought after by Russian businesses, but so far without success. Russian businesses are even compelled to look in the used market due to the shortage of wetsren components.
