Ottawa late Saturday granted an exemption to its sanctions on Moscow, bringing possible relief to Berlin, which fears it could be forced to fend for supplies. The Nord Stream 1 pipeline supplies Germany with much of its Russian gas. Canada had blocked the delivery of a gas turbine used in the pipeline, which was being repaired by German manufacturer Siemens Energy at its plant in Montreal, because of sanctions on the Russian energy sector. Moscow blamed the delay on its decision last month to cut the flow of natural gas through the pipeline by 60 percent, sending gas prices skyrocketing. Canada’s Natural Resources Minister Jonathan Wilkinson said on Twitter that he would “grant a time-limited and revocable permit” to allow Siemens Energy to move the turbine back to Germany. “If there is not the necessary supply of natural gas, the German economy will suffer very significant difficulties and the Germans themselves will be at risk of not being able to heat their homes as winter approaches,” said Wilkinson. Siemens Energy, which declined to comment, will need a further exemption from EU sanctions to be able to move the turbine to Russia. “We welcome the decision of our Canadian friends and allies,” the German government said in a statement on Sunday. The Russian decision to cut supplies had hampered German efforts to rebuild natural gas storage levels ahead of the winter heating season, when demand for natural gas is much higher. Gas market analysts said the turbine’s return to Russia could lead to an increase in flows once maintenance on the NS1 line – which is scheduled to close for 10 days of maintenance from Monday – is completed. However, there is a risk that Russia will find another reason to keep flows to the continent low. Officials in Germany fear the pipeline may not be back in service once maintenance begins. European officials have accused Russia of effectively using the turbine issue as an excuse to rig gas supplies, as state gas exporter Gazprom has refused to use alternative routes – which have plenty of available capacity – to cover the shortfall on the line NS1. Laurent Ruseckas, executive director of natural gas at S&P Global, said Russia may still be able to argue that it is only one turbine, while Moscow has said five of eight on the line need repairs. “The return of this turbine will partly call Russia’s bluff, as the pretense of reducing capacity would be completely undermined if the turbine was returned and not commissioned,” Rousekas said. Since Gazprom cut NS1 capacity last month, natural gas prices have soared from already elevated levels, with the European benchmark rising from more than 80 euros per megawatt hour to 169 euros per megawatt hour on Friday. Ukrainians criticized the move as another example of the West bowing to Moscow’s threats to cut gas supplies to Europe. “Unfortunately, Canada bowed to pressure and decided to return the turbine to Gazprom,” said Sergiy Makogon, CEO of Ukraine’s state-owned gas transmission network. “This is a very bad precedent for immunity from sanctions,”

Germany has activated the second stage of its gas emergency plan, including firing up old coal-fired power stations and asking households to cut consumption. The recent rise in prices has prompted utility Uniper, Germany’s biggest buyer of Russian gas, to seek a multibillion-euro bailout package from Berlin that is likely to lead to the government taking a stake in the company. French Finance Minister Bruno Le Maire warned on Sunday that the country should prepare for a cut in Russian energy supplies. “I believe that a complete cut off of Russian gas supplies is a real possibility. . . and we have to prepare for this scenario,” he told a conference in southern France.