Siemens agrees to supply turbines to Gazprom

22 March 2018, Week 11, Issue 902

Germany’s Siemens has signed a contract with Russia’s Gazprom to provide gas turbines for a thermal power plant (TPP) under construction in the Caucasus republic of Chechnya.

The Munich-based engineering group struck two other large deals in Russia in the past three months, having apparently drawn a line under a dispute with authorities over the delivery last year of four of its turbines to Crimea, in breach of EU sanctions.

In a statement on March 16, Gazprom said it had handed a contract to Siemens for the delivery, installation and commissioning of two turbines at the 360-MW Grozny TPP, which is slated to start producing power next year. The plant is being built by the Russian company’s power generation arm, Gazprom Energoholding, under a capacity supply agreement (CSA).

Siemens said last year it was reviewing its business in Russia after claiming that four turbines it had provided for a TPP in southern Russia had been illegally transported to Crimea without its knowledge. The peninsula, annexed by Moscow in early 2014, is subject to EU sanctions on the sale of technology and equipment.

In October, however, Siemens said it was interested in taking part in a large-scale modernisation programme planned at Russia’s TPPs, over half of which were built before 1980. The German company also signed a contract worth 380 million euros (US$449 million) in December to provide equipment for a 495-MW combined-cycle gas turbine (CCGT) plant in Russia’s Tatarstan region. The deal, struck with Russian plastics maker Nizhnekamskneftekhim, will see Siemens deliver two gas turbines and a third steam-powered one. And in late February, Siemens secured an eight-year contract to provide services at two power units operated by state-run Inter RAO in the regions of Sverdlovsk and Perm.

At a meeting last week, Gazprom CEO Alexei Miller and his counterpart at Siemens, Joe Kaeser, highlighted the importance of the Grozny TPP to the local energy market. The station, which is being built in the Zavodskoy district of Grozny, is expected to eliminate the region’s energy deficit while expanding its gas market, which is supplied by Gazprom. A previous TPP in the city was destroyed during the 1994-1996 Chechen war.

Joseph Murphy

Edited by

Joseph Murphy


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