Yuri Smityu / TASS

"We have encountered absolutely outrageous facts, when Siemens products delivered to ESPO facilities are failing en masse - five out of 20 powerful transformers and several electric pump drives have burned out in a short period of time," Nikolai Tokarev, president of Transneft, said in an interview with the corporate magazine "Pipeline Transport of Oil." According to him, the issue of their repair or replacement is being resolved for an unacceptably long time: "Such a prospect of cooperation is extremely depressing and cannot suit us." He called Siemens' behavior strange. "Even such a giant also followed the lead of politicians," Tokarev added. In the summer, the US and the EU imposed sanctions against Russian oil companies, including Transneft.

A Siemens representative said the company prioritizes interaction with Transneft. "We immediately began investigating the causes of the equipment failure. Our specialists are on site and are taking all necessary measures to repair the emergency equipment. In order to avoid a recurrence of abnormal situations, a comprehensive check of all transformers and frequency converters installed at the NPS is being carried out. Preventive maintenance measures are recorded in the equipment maintenance procedures and will be carried out on an ongoing basis. Depending on the results of the investigation into the causes of the malfunctions, we will fulfill all our warranty obligations stipulated by the contract," she said.

In April 2013, Transneft and Siemens signed a strategic cooperation agreement. The German company is participating in the project to expand the Eastern Siberia – Pacific Ocean (ESPO) oil pipeline. It will manufacture and supply electric motors and frequency converters for pumping stations. Transneft estimates the expansion of ESPO at 172 billion rubles. Siemens will also participate in the production and supply of transformers, integrated digital devices and protection systems, as well as equipment for power supply systems. Representatives of the companies did not disclose the size of the contract. In November 2012, Siemens reported that it had received an additional order from Transneft for equipment for ESPO worth 66 million euros.

In September 2014, Siemens Vice President Dietrich Möller said the company was looking to expand its partnership with Transneft in the coming months. Siemens is proposing to create a joint venture to produce electric drives for pumps and other equipment, but “we are in no hurry to sit down at the negotiating table,” Tokarev said: “After all, negotiations with Japanese and German partners took more than a year. And all in vain.”

According to Tokarev, other partners have already been found and a contract has been signed with them: "The world does not revolve around Europe." A representative of Transneft says that Siemens has been declaring the creation of production for a long time, but the issue has not moved forward. He did not name Transneft's new partner.

European companies are responsible partners. As a rule, equipment is delivered on time and of proper quality, says Alexander Romanikhin, CEO of the Union of Oil and Gas Equipment Manufacturers. The case with Transneft is exceptional; Siemens has always valued its reputation, he adds. Much depends on the customer, for example, how correctly the technical specifications for the equipment delivery were made.

Transneft has abandoned its partnership with Siemens