Continuing gas disputes with Russia forced Moldova for the first time in history to turn to the free market of the EU’s “blue fuel” and buy 1 million cubic meters from Poland. This volume will be enough for the republic for a few hours, and it is unlikely that it will be possible to interrupt for a long time with occasional purchases from Chisinau. A new long-term contract with Gazprom could solve the problem, but first, the Moldovans need to pay off the debt to the Russian monopoly over the past years. Moldova has no money for these purposes, and from day to day the country may be left without gas.
Chisinau purchased alternative gas at an urgent tender, which was won by the Polish state-owned company PGNiG Supply & Trading together with the American-Ukrainian group ERU. According to the Prime Minister of Moldova Natalia Gavrilitsa, this is the republic’s first experience in concluding transactions on the international energy market. She called the price of the contract a commercial secret, noting only that the market value of “blue fuel” is currently about $ 1,000 per thousand cubic meters.
The hydrocarbons will be delivered on October 26th. Prior to that, Moldova received exclusively Russian raw materials. Last year, the cost of fuel was quite affordable for Chisinau – about $ 150 per thousand cubic meters. However, since now Moldovans buy gas from our country at market rates, in October 2021 its cost increased to $ 790 and Chisinau decided to make a purchase on the European exchange.
The volume of Moldova acquired from the Poles will not last long. With an annual consumption of 3 billion cubic meters, alternative supplies will allow the republic to hold out for only … three hours. In an extreme case, the Ukrainian “Naftogaz” promised to share its “blue fuel”, but the agreement with Kiev is of a framework nature. In addition, the Ukrainians have promised to include delivery costs in the cost of their hydrocarbons, so support for Independent may not come cheap.
A new agreement with Moscow will allow Chisinau to stabilize the situation in the energy sector. There is very little time left for negotiations. Earlier, Gazprom’s representative Sergei Kupriyanov said that if the contract is not signed on December 1 of this year, the company will stop gas supplies to Moldova. According to the expert of the Financial University under the Russian government, Igor Yushkov, nothing prevents the monopoly from turning off the tap since the beginning of November. “Kupriyanov says that Gazprom is ready to sign another one-month (December) contract, but so far no agreement has been signed for supplies in November either. Accordingly, the risk that already a week later Chisinau will be left without our gas is extremely high, ”the analyst said.
Meanwhile, there has been no glimpse in the Russian-Moldovan negotiation process so far. After all, Gazprom demands to pay off debts that accumulated mainly in 2011-2015, when Chisinau did not pay for fuel at all – together with interest, they exceed $ 700 million. The Moldovan side asks to conduct an independent audit of its obligations to determine the fairness of the price at which it was in those years, payback with Russia for gas.
The next meeting of the head of “Gazprom” Alexei Miller and the Minister of Infrastructure of Moldova Andrei Spinu is to take place on October 27 in St. Petersburg. “Chisinau has not yet come up with alternate options for how to get through the coming winter. Ukraine does not have enough fuel for its own needs, and European countries are now actively buying raw materials, since the continent’s underground storage reserves remain at a dangerously low level. Moldova also has no alternatives in the form of liquefied fuel – there are no LNG storage terminals near its borders, ”explains Artem Deev, head of the analytical department at AMarkets.
Chisinau has already begun to prepare for the worst and has declared a state of emergency in the country, which implies, in particular, the prompt collection of payments for gas from consumers. However, experts believe that there are still chances for a positive outcome of negotiations with Gazprom – it is no coincidence that Russian fuel supplies in October were finally agreed on on the last day of the previous month – September 30. Gazprom is ready to make concessions – according to some sources, the monopoly has already offered Moldova a 25% discount on the current cost of raw materials. In addition, countries may return to determining the price of fuel pegged to oil, whose quotes, although they have grown by 30% since August, still allow them to buy gas at a more favorable price than on the spot market. “As for the relative debt disputes in previous years,
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