Russia sought Siemens turbines for Crimean plants

19 June 2017

Russia has disclosed for the first time it has been looking to install equipment made by German firm Siemens in two new power plants in Crimea, a project that has been beset with difficulties because of European trade sanctions.

The mention of the Siemens equipment was buried inside technical documents for the plants posted on Russia's official procurement website last week - and cancelled seven days later.

The project to build the plants in Crimea, the region Russia annexed from Ukraine three years ago, has hit obstacles because it cannot source the gas turbines it needs, sources familiar with the plans told Reuters in April.

Though it has never been officially acknowledged, people close to the project say the plants were designed to use gas turbines made by Siemens.

The company would be violating European Union sanctions on Russia and Crimea if it were to deliver the turbines. It said on Friday it was not supplying turbines for the Crimean plants.

On June 8, Technopromexport, the Russian state company building the Crimean plants, issued a tender on the official public procurement website for bids on a contract to prepare technical documents for the plants.

The tender identified the model of gas turbine planned for installation as "SGT-2000E" and the generators that work with the turbines as "SGen5-100A". Those models are manufactured by Siemens, according to the company's website.

The tender was cancelled on June 15. Asked about the cancellation, a Technopromexport representative said it was because changes were needed in the technical documents. The representative declined to give more details.

Russia's energy ministry did not respond to a Reuters request for comment.

It was not clear whether the plan to use the Siemens turbines was still in effect, or if Technopromexport was changing the type of gas turbines required.

Siemens' Russian business said in a statement sent to Reuters that it abided by all export restrictions. "Therefore we are not supplying equipment for use or delivery to Crimea," it said.

The power plants are some of Russia's most high-profile infrastructure projects. They are needed to give Crimea stable supplies of electricity, but also to prove Russia can deliver high-technology projects despite Western sanctions.

Russia has looked at alternative ways to get the turbines needed for the plants, which are to have a combined capacity of 940 megawatts and cost 71 billion roubles ($1.2 billion).

Those have included changing the specifications so the plants can use Russian-made turbines, buying turbines from Iran, or using Western-made turbines already in Russia that are idle.

However, there are doubts among engineers involved whether any of those options are feasible, and there is no consensus about how to proceed, according to the sources familiar with the project.