Gazprom Recruited by the Kremlin to Support Russia’s Defense Industry Complex
On May 23, at a meeting of the Board of the Military-Industrial Commission of the Russian Federation, Deputy Prime Minister Dmitry Rogozin (who Chairs the Commission and holds significant influence over Russia’s defense industry) signed a number of agreements with Alexey Miller, Chairman of Gazprom, for the latter to procure important equipment and technology from leading Russian defense firms.
Rogozin reportedly suggested Russia’s defense companies could meet Gazprom’s equipment needs as part of the country’s “import substitution” program, stimulated by the Western sanctions regimes following the annexation of Crimea. Specifically, it appears Gazprom is being encouraged to procure helicopters, pipes and gas turbines from companies administered under Rostec as part of the energy giant’s efforts to develop the offshore fields surrounding the Sakhalin Islands, where much of the specialized equipment has heretofore been sourced from Western suppliers.
The agreements signed at the meeting included the following:
- Gazprom signed an Agreement of Intent with Rostec to set up a separate entity to assemble, test, repair and maintain AL-31ST gas turbine engines;
- Russian Helicopters and Gazprom signed an agreement to provide maritime helicopters used to transport cargo and personnel. The helicopters would likely be modified Mi-171A2s.
- Gazprom Space Systems and United Rocket and Space Corporation signed a cooperation partnership to build five satellites as part of Gazprom’s SMOTR aerospace systems. The satellites would be used for remote sensing and safety at Arctic energy stations.
This subtext here is a new push by the Kremlin to leverage Gazprom’s buying power into support for Russia’s defense industry. Some outside observers, however, are skeptical of Russian industry’s ability to supply the necessary gas turbine engines, which are used for state-of-the-art compressor equipment, hydrocarbon production in offshore environments and natural gas liquefaction.