Russia cuts gas flow to Europe, raising new doubts about Canada’s sanctions exemption

Russia’s Gazprom finally acted after weeks of threats and hints overnight, reducing the already reduced flow of gas through the Nord Stream One pipeline to just 20 percent of its full capacity.

The move sparked fresh concerns in Germany, Italy and other European countries that rely heavily on Russian gas piped from Vyborg, Russia, to Germany’s Baltic coast.

But it also raised new questions for Canada’s government, which issued a controversial waiver from sanctions that was supposed to allow Gazprom to restore normal flows to Europe, which had fallen by about 60% since June.

As of 3 a.m. today, the flow is down by 80 percent, a rate that makes it virtually impossible for European countries that rely on Russian gas to fill their underground storage tanks for the winter .

The Kremlin, which controls Gazprom, has been tinkering with gas supplies to Europe in an effort to weaken sanctions imposed on Russia over its invasion of Ukraine.

Russia has argued that technical problems caused by the sanctions prevented normal deliveries.

The turbine dispute

At the center of these arguments are half a dozen Siemens gas turbines that compress and propel gas through the undersea pipeline. These turbines are typically removed from service on a regular rotating schedule and refurbished at Siemens Energy Canada’s Montreal workshops.

But when Canada sanctioned Russia’s oil and gas sector, Siemens Energy was unable to return one of the turbines to Russia via Germany.

Russia warned it would cut flow unless it restored its turbine. German Chancellor Olaf Scholz’s government asked Canada to make an exception to its sanctions regime to allow the turbine’s return.

“We were certainly under a lot of pressure from Germany and the European Union, and on the other hand we were under pressure from the Ukrainian government,” Natural Resources Minister Jonathan Wilkinson told CBC News on 11 July, a day after his government granted a “temporary” and “revocable” sanctions relief to allow the turbine’s return.

The Trudeau government’s decision was heavily criticized by Ukrainian President Volodymyr Zelensky and Ukrainian diaspora organizations in Canada.

Canada does not indicate any changes to the waiver

Ukrainian officials told CBC News today that the supply cuts showed that the sanctions waiver should not have been granted in the first place.

“This decision to waive sanctions actually had no practical impact on helping European countries, first Germany, secure their gas supplies,” said Yulia Kovaliv, Ukraine’s ambassador to Canada.

“Instead, we see the next steps of Gazprom blackmailing its European consumers.”

Kovaliv noted that the sanctions waiver was presented as “revocable.”

“Gazprom, we believe, took every step to provide the evidence that this permit needs to be removed,” he told CBC News.

Natural Resources Canada, which granted the exemption, was highly critical of Gazprom’s latest move.

“The Russian regime and its propaganda weapons are clearly creating additional false pretexts to deliberately encourage and provoke energy instability across Europe in an attempt to sow division among allies as it continues to wage its unjustified war against Ukraine.” department spokesman Keean Nembhard told CBC. news

“We see through their lies. The only person who would stop gas flowing to Europe is Putin (Russian President Vladimir).

But neither Natural Resources Canada nor Global Affairs Canada responded directly when asked if the Trudeau government was considering revoking the waiver in response.

Calling the bluff of the Kremlin

No one can claim that the flow reductions surprised the governments of Germany or Canada, both of which have insisted they are not naïve about Russia’s intentions.

Wilkinson told CBC News after tendering the resignation that his government was well aware that Russia was using the turbine as a pretext and that it might not restore full flow.

Putin “was saying very publicly that if the turbines were not returned, it would be our fault that Germany was losing access to Russian gas,” the minister said.

“That doesn’t mean Putin won’t shut it down on his own. But it’s a very different circumstance than being able to say it was because of Canada’s unwillingness to help our friends in Germany.”

WATCH: Natural Resources Minister Jonathan Wilkinson says penalty waiver ‘not a gamble’

Turbine return ‘not a bet’ despite risk Russia could cut gas anyway: minister

“We had to remove the excuses that President Putin has as to why the Nord Stream pipeline could be shut down,” Canada’s Natural Resources Minister Jonathan Wilkinson said of the decision to return the sanctioned Russian turbines, insisting that the decision it’s not a bet.

German leaders said their country was determined to call Putin’s bluff on the turbine, knowing full well he could still manipulate the flow based on political calculations.

“We’re delivering now to prevent Russia from having the excuse that we’re basically hurting ourselves,” Sabine Sparwasser, Germany’s ambassador to Canada, told CBC News.

“In the opinion of many experts, it is a pretext, but we remove this pretext. We are delivering the turbine and then we will see if there is a weaponization of the energy stopping the delivery or not.”

Resignation questioned

As currently structured, the exemption would extend for two years and allow numerous turbines to circulate across Canada.

The exact location of the turbine already returned under the penalty waiver is unclear. Russian media reported on July 18 that it was on its way from Germany to the Russian Portovaya compressor station.

On Tuesday, Kremlin spokesman Dmitry Peskov claimed it had not yet arrived in Russia. “We hope it happens … sooner rather than later,” he said.

“The situation is critically complicated by the restrictions and sanctions that had been imposed on our country.”

Russian President Vladimir Putin, left, listens to Alexei Miller, head of Russian gas monopoly Gazprom, during a meeting in Moscow on September 16, 2020. (Mikhail Klimentyev/The Associated Press)

But Siemens Energy told CBC News that the only obstacle to the turbine’s entry into Russia was the Russian government’s failure to provide an import permit.

“The German authorities provided Siemens Energy with all the necessary documents for the export of the turbine to Russia early last week. Gazprom is aware of this,” a Siemens spokesman said. “What is missing, however, are customs documents for import into Russia. Gazprom, as a customer, is obliged to provide them.”

Germany’s nuclear option

Germany has faced heavy criticism since the Ukraine war began for becoming dependent on Russian energy (against warnings from allies) and for deepening its energy problems by choosing to shut down its nuclear power plants , a long-standing target of the ruling coalition member. the Green Party.

This decision forced Germany to replace low-carbon nuclear with lignite, the dirtiest and most carbon-intensive form of coal. It also deepened its dependence on Russian energy.

Wilkinson defended Germany’s right to shut down operational capacity, although he asked Canada for a waiver from sanctions because of the feared shortage.

But today, Germany’s energy inspector told Bild newspaper that Germany is considering canceling the proposed shutdown of three nuclear power plants this December and may also reopen plants that were already closed.

An RWE AG nuclear power plant in Lingen, Germany, on March 18, 2022. (Martin Meissner/Associated Press)

Ukraine makes a new offer

Ukrainian officials told CBC News they have made a new offer to Germany to supply it with electricity.

The power would come from Ukraine’s own nuclear, hydro and renewable generation capacity, despite the difficult wartime conditions Ukraine faces, including the occupation by Russian troops of its Zaporizhia nuclear power plant , the largest in Europe.

The electricity on offer, Ukraine said, would be equivalent to five billion cubic meters of natural gas and would help Germany and its western European neighbors reduce their dependence on Russia.

Olga Bielkova speaks for the state gas company of Ukraine. He said the overnight reductions in Nord Stream were “not a surprise at all”.

“I’d like to say I told you, but I was trained not to.”

Bielkova said that reporting on the energy problems of Western and Central Europe often overlooks the catastrophic energy situation facing Ukraine itself.

Before the war, Ukraine was one of the largest producers of natural gas in Europe, with 20 billion cubic meters per year. But it has seen its pipelines damaged, its facilities attacked, much of its territory occupied and much of its industrial base destroyed.

Bielkova said it is time for European nations to face a reality that Ukraine has already accepted.

“It is very likely that at some point they will put all of us in a very difficult situation by stopping this supply, regardless of which routes, be it Nord Stream One, the Ukrainian route or TurkStream. And Europe as the largest consumer of Russian gas. should exercise some power as a customer.”

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