Russia seeks to avoid sanctions by buying equipment from Iran

ABU DHABI, Feb 20 (Reuters) – Russia hopes to get around European Union sanctions by reaching a deal with Iran for the supply of gas turbine equipment for two power plants in Crimea, the head of Russian state defence conglomerate Rostec said on Monday.

EU sanctions bar European individuals and companies from providing energy technology to Crimea, which was annexed by Moscow from Ukraine in 2014.

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“Yes, we have problems with turbines, because Germany and some other European countries have banned deliveries to Crimea,” Sergei Chemezov told reporters during a briefing in Abu Dhabi.

“We are negotiating with Iran, they are manufacturing similar turbines,” he said.

Russia is constructing two power plants with a total capacity of 940 megawatts to improve Crimea’s energy independence. Crimea already has a power line linking to Russia’s Taman peninsula across the Black Sea.

The completion of the first plant is scheduled by the end of 2017, while the other one is expected to be completed in 2018.

Chemezov, who is a close associate of Russian President Vladimir Putin, is also on a list of Russian individuals and companies sanctioned by the West over Moscow’s actions in Ukraine.

The gas turbine contract with Iran should be signed soon, although Moscow and Tehran have yet to agree on price, a source told Reuters on Monday, adding that the first turbine could not be completed and installed until early 2018.

Russia’s Energy Ministry said that Rostec had not sought an extension to the deadline and Chemezov said that the project should be completed by the end of 2017.

The commissioning of the power plants was delayed in December after a Russian joint venture majority-owned by Germany’s Siemens was subject to export control restrictions imposed after Russia annexed Crimea from Ukraine in 2014.

(Reporting by Stanley Carvalho in Abu Dhabi; Gleb Stolyarov, Anastasia Lyrchikova and Anton Zverev in Moscow; Writing by Aleksandar Vasovic; Editing by Alexander Smith)