Siemens stops shipments to Ukraine’s Naftogaz, fearing lost contracts in Russia

The Siemens headquarters in Munich. Photo: Wikimedia commons

The Siemens headquarters in Munich. Photo: Wikimedia commons 

News

The German company Siemens has stopped supplying equipment for the modernization of the gas transportation system of Ukraine, fearing to lose orders in Russia, Andriy Koboliev, head of the board of Ukraine’s gas transporting monopoly Naftogaz said in a speech during the annual meeting of Yalta European Strategy, Yevropeiska Pravda reported.

“We had agreements on the supply of Siemens compressor systems when we started working on modernizing the gas transport system, but subsequently they refused such cooperation because it threatened their contracts with Russia,” Koboliev said.

The Naftogaz head added that the modernization of the gas transportation system requires guarantees of gas transit after 2019, when Ukraine’s contract with the Russian Federation expires.

“In order to invest in modernization, we need to know the prospects for the operation of the gas transportation system after 2019. It is clear that we are losing the southern direction of transit [because of the construction of the Turkish Stream – Ed]. Therefore, we need clarity about Nord Stream-2,” he concluded.

UNIAN provided additional details, citing Koboliev on the sidelines:

“First the compressors were delivered, those were compressors from Siemens. But shortly after we had a call from Siemens, and they said that if they delivered another piece of the equipment, their supplies to Russia would be reduced to zero.”

Earlier, Euromaidan Press reported about gas turbines produced by Siemens’ daughter company in St.Petersburg ending up in occupied Crimea, where Russia aims to install them in two power stations under construction. EU sanctions prohibit companies from participating in investments in power or infrastructure ventures in occupied Crimea as called to supply the illegally annexed peninsula with electricity. Siemens claimed it had been fooled by its Russian partner, but our investigation shows that Siemens, at the very least, is guilty of criminal negligence.

Tags: , , ,

  • Ihor Dawydiak

    The fact that Companies such as Siemens have no moral scruples has been well established but the problem lies in how can such Companies be “persuaded” to stop dealing with the devil. To this point there are at least three options or a combination of options which could include; 1) The launching of a propaganda war against such Companies such as Siemens by discrediting them and their affiliates as shameless brokers, 2) Increasing sanctions against Russia whereupon Companies such as Siemens would be unable to legally deal with Muscovy, 3) A widespread boycott or a restriction of sales of Siemens products by key importers such as the USA. As such, when the financial sales of Siemens products take a direct hit, the Company in all likelihood will sing a different tune. All that is needed is a measure of cooperation from those concerned.

    • Dale Davies

      Note my post below for the 4th option.

  • zorbatheturk

    Shame.

    • RedSquareMaidan

      Looks like Siemens has made their decision to support criminal behavior, buckle under mafia pressure and bow to money instead of doing the right thing. Siemens is losing their reputation fast.

      • Dale Davies

        Depending on the style of compressors being used, there are a number of alternatives. If using axial flow, Moto Sich could be tapped to design and built new in house. The technology is very similar to turbine engine design. Then they could compete with Siemens in the international markets and let the chips lay where they fall. The international market could be more lucrative than Pootlerstan!

  • Screwdriver

    Naftogaz is a very sick horse, will be dead soon, once all the pipes coming from Russia to Ukraine dry out. So it is a wise decision to dump Naftogaz, and bet on the real player.

    • Murf

      No it won’t.
      The new US sanctions are jeopardizing the financing for the project. Even if new funding is found there is no assurance the US won’t sanction that also.
      NordStream 1 isn’t even operating at half capacity and the assumptions on transit costs assume full capacity for Nordstream 2.
      Which is hard to foresee since gas consumption in Europe is decreasing and competition by other gas suppliers is increasing.
      It also assumes Ukraine, Slovakia and Cezh maintain their current transit fees.
      Ukraine modernizing their GTS means they will be able to reduce their fees and still clear a profit. Just replacing leaky pipes will cut losses from escaping gas by 10-15%.
      GAZPROM understands this and that is why the Kremlin pressured Siemens to stop deliveries. However that will not stop the modernization. Ukraine is already working with GE as alternative supplier. This will also increase Ukraine’s soft power in the US. Given the extensive refurbishing the GTS needs I would not be surprised if Ukraine licences builds the pumps in country eventually.

      A couple of years ago the Russian energy Minister said they would be using the Ukraine even after 2019. Nordstream 2 is just a bargaining chip in transit fee negotiation.

    • zorbatheturk

      The EU should put a tariff on RuSSian gas.

  • veth

    Schroeder, the former German PM is no doubt behind this crime.

  • Tony

    So Siemens decided it’s going to be Russia’s lapdog.
    Very well, cancel all Siemens orders, send existing equipment back and demand refunds.
    Launch an awareness campaign that shows Siemens has no social responsibility and that it gladly supports terrorist states for profit, thus encourage others to not do business with them(especially let them loose US market if possible).
    Finally reinvest the cancelled orders in Siemens competitors, preferably local manufacturers.

  • Reuben F. Johnson

    Another item for the “How Germany Sucks Up To Russia and China And Screw All Countries Being Ransacked By Them” file.