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Prime Minister Justin Trudeau’s government will revoke the waiver that exempted Nord Stream pipeline turbines from Canadian sanctions on Russia’s oil and gas industry, a senior government official said.
The decision has been communicated to the German and Ukrainian governments and is expected to be announced by Canada later Wednesday, said the official, who spoke on condition they not be named.
Trudeau and German Chancellor Olaf Scholz discussed the issue on a call Tuesday, though Natural Resources Minister Jonathan Wilkinson has been the main point of contact with European counterparts.
Nord Stream, owned by Gazprom PJSC, supplied natural gas from Russia to Germany but has remained shut down after being damaged by undersea explosions in late September, making the waiver a moot issue for the foreseeable future.
Earlier this year, however, the turbines were caught up in geopolitical wrangling between Russia, Germany, Ukraine and Canada.
Manufactured by Siemens Energy AG, they need regular servicing at a facility in Montreal. But a return shipment was halted when Canada unveiled sanctions in June that prohibited companies from providing services to Russia’s energy industry.
Germany, facing a potential crisis due to being cut off from Russian gas, pressured Canada to exempt the turbines to avoid giving Russia an excuse to shut down the pipeline completely. Ukraine, meanwhile, furiously opposed any form of loophole in the sanctions.
After a public appeal from German Economy Minister Robert Habeck, Canada announced a sanctions waiver on July 9. That allowed for a turbine in Montreal to be exported back to Europe, and for other turbines to be sent to Canada for servicing over the next two years.
The waiver ultimately failed to keep Nord Stream in operation. Russia refused to take the turbine back and insisted it was Germany causing the problem, arguing that more sanctions had to be lifted.
Now, with Nord Stream idled due to the explosions and Germany signing contracts for other sources of gas, the turbine issue has faded in importance, giving the Canadian government room to revoke its waiver.