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Pipes at the landfall facilities of the Nord Stream 1 gas pipeline in Lubmin, Germany, on March 8.HANNIBAL HANSCHKE/Reuters

German Chancellor Olaf Scholz says Prime Minister Justin Trudeau called the Kremlin’s bluff by allowing Russian pipeline turbines repaired in Canada to be sent back to Moscow’s state-controlled Gazprom, arguing that this move eliminated a pretext for Vladimir Putin to reduce or stop deliveries of natural gas to Europe.

Ottawa circumvented its own sanctions against Russia in the decision last month, drawing harsh criticism from Ukraine for what it described as bending to Moscow’s blackmail.

Mr. Scholz, however, defended Mr. Trudeau and told The Globe and Mail that he considers criticism of the Prime Minister and his government over this matter to be “utterly baseless.”

He also said he would welcome liquified natural gas supplies from Canada as Germany works to reduce its reliance on Russian energy.

In June, Gazprom cited the delayed return of natural-gas turbine equipment, which Siemens Energy had been servicing in Montreal, as the reason it decided to reduce the flow of natural gas through the Nord Stream 1 pipeline that serves Germany to 40-per-cent capacity. Nord Stream 1′s majority shareholder is Gazprom and Gazprom’s majority owner is the Russian government.

Transcript of The Globe’s interview with German Chancellor Olaf Scholz

Russia says can’t do much to help with Nord Stream gas pipeline repair

The first turbine stranded by sanctions in Canada has already been sent back to Germany but it has not yet been delivered to Gazprom operations in Russia.

Since the July decision by the Trudeau government, Russia has cut gas supplies via Nord Stream 1 to 20 per cent, again blaming the delayed turbine. As recently as July 29, Gazprom was also complaining that maintenance of this turbine was not in line with the contract.

German cities have already begun to push energy-saving measures. Some are turning off spotlights at monuments and shutting down fountains. And Hanover is one of the first large cities to turn off hot water in public buildings.

The House of Commons foreign affairs committee is holding hearings on the Russian turbines Thursday and has summoned Foreign Affairs Minister Mélanie Joly and Ukraine’s ambassador to Canada, Yulia Kovaliv, to testify.

Mr. Scholz said Berlin’s ambassador to Canada, Sabine Sparwasser, will also testify and explain Germany’s position in urging Canada to return the turbine and service other Gazprom equipment.

Mr. Trudeau has explained his actions by saying he did not want punitive rules aimed at the Putin regime to contribute to the energy crisis in Europe and hurt natural-gas consumers in countries such as Germany.

Mr. Scholz, in response to written questions from The Globe, said the Prime Minister’s “strong decision” to release the turbine eliminated an excuse that could be used by the Russian President to justify cutting natural-gas supplies to Germany and other European countries. The July agreement made by the federal government includes allowing the import and repair and export of multiple turbines between now and 2024.

“Thanks to Prime Minister Trudeau, we were able to call Putin’s bluff. We never believed that the reduced deliveries had technical reasons,” Mr. Scholz said. “With the turbine ready to be delivered, it is up to Russia to resume their contractual obligations.”

The turbines are vital components of compressor stations along the Nord Stream 1 pipeline that maintain the pressure in the line as it moves gas from Russia under the Baltic Sea to Germany.

The German leader said Russia is trying to divide allies by blaming the delay of a turbine for reduced gas shipments.

“Russia is trying to exert pressure and to pit one ally against the other,” Mr. Scholz said, adding that this should not be allowed to succeed.

Germany’s Siemens Energy had been servicing the turbine at its Montreal facilities when Ottawa imposed sanctions to punish Russia for the war against Ukraine. At the urging of Germany, Canada approved a sanctions permit that functions as an exemption and allows the import, repair and export of up to six Nord Stream 1 turbines in Canada over the next two years.

Ottawa’s July 9 decision on the turbine equipment was also supported by U.S. President Joe Biden’s administration, which called it the right move because it would allow Europe to fortify its natural-gas reserves for the cold winter months ahead.

“If Moscow decides not to live up to its contractual obligations, then let this be crystal clear to the whole world. Thanks to Canada, this will now be the case,” Mr. Scholz said. “It’s a well-known playbook by now: Russia wanted to stop gas deliveries and blame our sanctions regime for the result.”

President Volodymyr Zelensky and the Ukrainian government have sharply criticized Ottawa’s decision, saying it is a dangerous precedent that will encourage Mr. Putin to keep using energy as a weapon.

Critics including the Ukrainian Canadian Congress said Ottawa’s decision to create a loophole in its sanctions undermines penalties against Russia for its full-scale military assault on Ukraine.

The Ukrainian World Congress (UWC), an advocacy group representing Ukrainians abroad, has announced a legal challenge of the decision in the Federal Court of Canada.

Germany’s Chancellor said Western sanctions against Russia are increasing, not decreasing.

“I consider the criticism against Justin Trudeau and his government as utterly baseless. The decision to deliver the turbine is hardly a favour to Gazprom,” Mr. Scholz said.

“It is a strong sign of support for Germany and for Europe and of maintaining solidarity amongst close allies in order to sustain long-term support for Ukraine. How would weakening Germany and Europe help Ukraine?”

Mr. Scholz said Western sanctions should not punish Europe and noted that for the most part they are working to cripple Russia. “Russian productive capabilities are falling rapidly, its economy is in recession and its access to critical goods has been severely reduced,” he said.

Ukraine has argued that Germany could have got supplies of natural gas from the Gazprom pipeline that runs through Ukraine.

“Why would Russia deliver more gas through Ukraine? I don’t believe this would have happened,” Mr. Scholz said.

Asked why Germany had remained reliant on Russian natural gas when the United States had warned years ago that Mr. Putin could weaponize energy supplies, Mr. Scholz noted that his country and others in Europe have been buying this fuel from Russia for decades. He recalled that there was a time when countries had hoped Moscow could be a constructive player on the international stage.

“But still: I don’t want to deny that we have relied too long and too single-sidedly on energy supplies from Russia. Today, we live in a different reality and we are quickly adjusting,” he said, noting that Germany will cease imports of Russian oil by the end of the year.

“Gas is the toughest part, but the share of Russian gas in our imports has fallen rapidly, in only a few months from 55 per cent to 30 per cent,” he said.

“In this context, we would welcome LNG supplies also from Canada.”

The Chancellor is bringing a trade delegation to Canada in August to explore the possibility of German investment and technological assistance in building two liquified natural gas facilities on the East Coast.

He said Germany is interested in Canadian hydrogen energy and Canada’s abundant deposits of critical and rare earth minerals. Western countries are trying to reduce their reliance on China for critical minerals.

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