Siemens Moves to Localize Gas Turbine Production in Russia

German industrial manufacturing conglomerate Siemens has applied for a so-called “special investment contract” to localize production of its high-capacity gas turbines in Russia, Interfax reported.

Under the terms of the contract, the components of the “hot gas path” and the gas turbine automatic control system will be localized in Russia until the middle of 2023, according to the Siemens press service.

The German company’s move follows a 2017 scandal over the supply of Siemens turbines to Crimea.

The planned localization level of the SGT-2000E turbine will be at least 90 percent. The process will take place at the Siemens Gas Technology Turbines (STGT) plant, which is a joint venture between Siemens and Russia’s Power Machines.

According to the Siemens statement, it will make significant investments in STGT and partner enterprises in order to develop know-how and increase the innovative potential of Russian companies. As a result, a full-cycle production ecosystem will be created in Russia for the production of high-capacity turbines.

The German company has already identified suppliers for the localization of the SGT5-2000E gas turbine’s ‘hot gas path’ components.

In 2017, Siemens was caught up in a scandal when its gas turbines were allegedly delivered to Crimea, which has been under EU and U.S. sanctions following its reunification with Russia. Western companies are prohibited from doing business in the region.