Iran surprised with an unexpected statement about signing a contract with Russia for the supply of 40 gas turbines. And in this case we are not talking about turbines for Russian gas pipelines, but about turbines for thermal power plants. Gas turbines are far from a mass commodity, and a contract for such a large number of turbines can claim to be the deal of the century. However, does Russia need so many Iranian turbines?The Managing director of the Iranian Gas Engineering and Development Company (IGEDC), Reza Noshadi, spoke about the signing of a contract with Russia for the supply of 40 gas turbines, IRNA news agency reports.
"Iran and Russia have signed an export agreement on sending 40 Iranian–made turbines to Russia," he said. According to him, 85% of the equipment necessary for the gas industry is produced domestically.
The Iranian side does not give details about what kind of turbines they are and with whom exactly the contract was concluded. There are no statements from the Russian side at all.
Recently, Siemens turbines have been discussed in Russia, which were installed at the Nord Stream –1 gas compressor station. They required repairs at a Canadian plant, but Gazprom was unable to repair the turbines due to sanctions. Therefore, in the end, the work of Nord Stream–1 had to be stopped completely.
However, it is unlikely that this story is about replacing German turbines with Iranian ones for gas pipelines. Firstly, the pipes of the "Northern Streams" are undermined, and the meaning of their repair is not obvious in principle. Secondly, Russia has its own turbines to replace the Siemens ones, which were installed on all the following gas pipelines – both at the Turkish Stream and Nord Stream–2 gas compressor stations. At one time, Nord Stream–1 received German turbines, probably because this gas pipeline was built in cooperation with foreign investors, including German ones. Thirdly, 40 turbines is too much for gas pipelines.
Most likely, we are talking about gas turbines from Iran for thermal power plants in Russia, although 40 gas turbines looks a lot even in this case. Russia can produce gas turbines, but of small and medium capacity, and attempts to create its own turbine with a capacity of 100-120 MW have not yet been crowned with success. This "hole" was closed by the Siemens assembly plant in Russia. However, due to geopolitics, the German company left the market without leaving its technologies to Russia. At the same time, the localization of production in Russia was small, mainly it was about screwdriver assembly (when ready-made equipment and parts are imported to Russia, and at a Russian factory they are simply assembled like "lego"). In general, turbines are not a mass, but a niche product, so this option looked quite economically justified earlier.
"I would treat this statement of Iran with a certain degree of skepticism. It is unclear who is the buyer from Russia. Turbines are bought not by the state, but by specific companies. Are they ready to contract 40 gas turbines, presumably with a capacity of 120-150 MW? This is a very large number. Usually, major global manufacturers – Siemens, Alstom or General Electric – make turbines to order under a contract, there are not many free turbines in warehouses. And it is rare for such a large number of turbines to be put into production at the same time. Therefore, most likely, Iran is only considering the possibility of signing an agreement with Russian companies," believes Sergey Kondratiev, deputy head of the Economic Department of the Institute of Energy and Finance.
He is not sure that Russia needs Iranian gas turbines at all. "Right here and now, Russia does not need an urgent sharp increase in generating capacity," the expert says. In general, 40 units is the maximum number of Iranian turbines that could appear in Russia in principle. "I think that at best we are talking about deliveries on the horizon of 2025-2030. Iran can supply a maximum of 6-10 turbines per year. We must understand that the Russian market is small in this regard," says Kondratiev.
There is nothing surprising in the fact that Iran can actually produce high-capacity gas turbines, unlike Russia. At one time, Iran was able to get Siemens to retain a license for the production of such turbines, despite sanctions, by replacing materials and parts with imports.
It is more difficult for Russia to agree on maintaining the production of such Siemens turbines inside the country, including due to lower localization and the need to look for the necessary spare parts in friendly countries.
"Our manufacturers, in particular, Power Machines and UEC, are unlikely to be happy about the appearance of such competition. On the other hand, we still need this competition to force domestic manufacturers to improve their product and maintain a balanced pricing policy. Otherwise, this type of activity turns into a monopoly, which must be regulated. Buyers may be unhappy," says the deputy head of the Economic Department of the Institute of Energy and Finance.
Why might Russia need Iranian gas turbines? To create a competitive environment within the framework of the program of modernization of power plants "Commodus", the expert believes. In his opinion, it will be economically unprofitable to replace relatively new foreign gas turbines at Russian thermal power plants.
"I think that Siemens or General Electric equipment at our thermal power plants will not be touched for at least several years, because all this equipment is new, built in 2012-2017. And the average service life of a turbine at a thermal power plant is 30 years with the possibility of extension. The write–off of a five-year or even a ten-year turbine will create very large costs for the generator and for the consumer," says Kondratiev. Therefore, the problem of the lack of Western spare parts and repairs is likely to be solved by establishing parallel import of spare parts and own production within Russia.
"We see by the example of Iran that it still uses Western equipment that it got in the seventies. At the same time, it independently produces many spare parts for its repair. A classic example is airplanes. Iran produces aircraft parts for its Boeing, maintaining airworthiness at a good level",
– says the expert.
However, there are thermal power plants that were built in the 1970s and 1980s on steam installations. And now, as part of the modernization, they can be replaced with purely gas installations or combined-cycle installations, which consist of steam turbines (Russia is able to produce them), high-power gas turbines (Iran produces them) and boilers. The third option, the expert notes, is to replace the old steam installation with a more efficient modern steam turbine.
In theory, Iranian gas turbines may also be of interest to Rosneft or Novatek, which are building LNG plants, since the gas liquefaction process is energy-intensive. Or for other industrial enterprises where large power generation is needed, the interlocutor concludes.
Olga Samofalova
