Canada will return sanctioned Nord Stream turbine to Germany

Nord Stream 1

Canada has agreed to export a natural-gas turbine back to Germany for use in the Nord Stream pipeline, issuing a “time-limited and revocable” permit to exempt it from sanctions on Russia’s oil and gas industry.

The decision was made over the objections of Ukraine’s government and the large Ukrainian diaspora in Canada, who argued that sending the pressurization turbine back would undermine the sanctions regime. 

German officials have urged Canada to find a way to return the turbine, fearing Russia would use the issue as an excuse to shut down Nord Stream and cripple Germany’s ability to fill its gas storage tanks ahead of winter.

In a statement released Saturday, Canadian Natural Resources Minister Jonathan Wilkinson said the export permit was issued after extensive discussions with “our European friends and allies,” as well as the International Energy Agency.

“Canada will grant a time-limited and revocable permit for Siemens Canada to allow the return of repaired Nord Stream 1 turbines to Germany,” Wilkinson’s said in a statement.

“Absent a necessary supply of natural gas, the German economy will suffer very significant hardship and Germans themselves will be at risk of being unable to heat their homes as winter approaches.”

The turbine, built in Canada by Siemens Energy AG, was sent to Montreal for repairs and became stranded due to sanctions on Russia’s oil and gas industry because of its invasion of Ukraine.

Also on Saturday, Canada announced it would expand its sanctions on Russia to include industrial manufacturing.

“These new sanctions will apply to land and pipeline transport and the manufacturing of metals and of transport, computer, electronic and electrical equipment, as well as of machinery,” said a news release from Foreign Affairs Minister Melanie Joly.

“Once the measures are in effect, Canadian businesses will have 60 days to conclude contracts with targeted industries and services.”

© 2022 Bloomberg L.P.

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