What Gazprom says about the new 5-year gas supply contract with Moldova?

The natural gas delivery contract between Gazprom and Moldovagaz has been extended for five years on mutually beneficial terms, the Russian giant officially announces in an information note.

“Today in St. Petersburg, following negotiations between Alexey Miller, Chairman of the Gazprom Management Committee, Andrei Spînu, Deputy Prime Minister, Minister of Infrastructure and Regional Development of Moldova, and Vadim Ceban, Chairman of the Board of Directors of Moldovagaz company, a protocol was signed to solve current problems in the energy sector. Gazprom and Moldovagaz have extended the contract for the supply of Russian gas to Moldovan consumers from November 1, 2021, for a period of five years on mutually beneficial terms,” the note reads.

After the announcement, Action and Solidarity Party deputy Radu Marian said that “the gas price is based on the Moldovan formula: a price much lower than the market price”, adding that “the parties agreed to audit the debt formed at Moldovagaz. Following the acceptance of the audit result, there will be discussions on a debt repayment schedule.”

On October 27, European Commission President von der Leyen announced that the EU will provide Moldova with 60 million euros to manage the energy crisis. This came after Andrei Spînu, who left for negotiations in Moscow on October 21, said that the offer proposed at that time by Gazprom was not to the benefit of Moldovans, TASS later reporting that Gazprom would extend the contract only if Chișinău paid the 709 million dollars debt. After transferring 84 million euros to the joint-stock company Energocom to purchase gas from sources other than the Russian giant Gazprom on October 22, the Government in Chișinău announced on October 25 that a contract for a trial purchase of 1 million cubic metres of natural gas had been signed between the state-owned Energocom and the Polish company PGNiG, with gas tariffs remaining unchanged. On October 26, the Dutch company Vitol won the tender for the supply of 1 million cubic meters of natural gas to Moldova, with DXT Commodities and PGNiG being announced winners of the third tender of Energocom for the delivery of 1.5 million cubic metres of natural gas on October 27. On October 28, the Ukrainian company Naftogaz, along with two other European companies won the fourth round of tenders launched by Energocom for the purchase of 1.5 million cubic metres of natural gas. 

• The EU will Provide 60 Million Euros to Moldova for Crisis Management in the Energy Sector

On October 22 this year, a state of emergency was announced in Moldova regarding the crisis in the gas sector. The Commission for Exceptional Situations, by decision No 1 of the same day, mandated Energocom, a 100% state-owned company, to conclude a contract with Moldovatransgaz for a total amount of 5 million cubic metres.

Sources: gas prices for Moldova could reach 500-600 dollars per 1000 cubic meters

The price of Russian gas for Moldova under a new contract with Gazprom could reach 500-600 dollars per 1,000 cubic metres according to Tass. Thus in the first and fourth quarters, Moldova will buy 70% of the volumes linked to the oil price, and the rest – at market prices, in the second and third quarters – 30% linked to the oil price and the rest – at market prices. According to the source, “taking into account the market situation, the changes may lead to a two-fold increase in prices compared to the old formula, up to 500-600 dollars per 1,000 cubic meters.” The new contract also provides for the payment of Moldova’s historical debt for gas deliveries of 709 million dollars, of which 433 million is the amount of the debt and 276 million – the penalties imposed by Gazprom, the source mentioning that Moldova has insisted on an audit of this debt. Gas deliveries under the new contract are due to start from 1 November 2021. In October, Moldova received gas under a one-month extension of the contract with Gazprom, in insufficient volume. The volume shortfall was purchased during this period on the spot market at a price of 709 dollars per thousand cubic metres of gas.

Spînu, about the new contract with Gazprom. Details on price and conditions: “We will have a price 2 times lower than the market price and a lower price than we paid in October”

Andrei Spînu came with clarifications on the contract conditions, saying that the price for Russian gas will be 450 dollars per thousand cubic meters, followed by a decrease according to the gas price on the stock exchanges. He also claimed that no political concessions were made in the negotiations. The historic debt will be paid after an independent audit. The Minister of Infrastructure and Regional Development added that “Under current conditions, we will have a price twice lower than the market price and a price lower than we paid in October,” mentioning that “the new contract signed does not provide for any political conditionality and does not mention the Transnistrian region in any way.” “We agreed that an independent audit of this debt will be carried out in 2022. On the basis of this audit, the amount will be determined and further negotiations will be held on how and when Moldova-Gaz will pay this debt.”