Moldova, less reliant on Russian gas imports: Gazprom loses control over Moldova’s gas transport network, whereas Chișinău authorities say the country’s 700-million-dollar debt to Gazprom is a sham.
Gas transport switches management from Russia to Romania
The natural gas transport grids of the Republic of Moldova will be taken over by Vestmoldtransgaz, a company 75% owned by the Romanian national gas transport operator, Transgaz, and 25% by the European Bank for Reconstruction and Development. According to a press release published by Transgaz, on September 4 Vestmoldtransgaz “signed the lease whereby it takes over the operation, exploitation, dispatching and transport of natural gas in the Republic of Moldova from Moldovatransgaz Ltd starting September 19, 2023”.
According to the same release, Transgaz executive director, Ion Sterian, said that “Transgaz maintains a strategic presence in the Republic of Moldova, contributing to safeguarding the region’s strategic interests. Ensuring the separation and independence of natural gas transport operators from vertically integrated enterprises involved in natural gas production, distribution, stockpiling and trading activities is one the core objectives designed to create a liberalized natural gas in the Republic of Moldova”, Ion Sterian also said.
The lease stipulates that Vestmoldtransgaz must pay Moldovatransgaz 8.5 million EUR per year for using the gas distribution grids controlled by this company.
Moldovatransgaz is a subsidiary of Moldovagaz, controlled by the Russian energy giant Gazprom. It was founded with the purpose of providing natural gas transport services after Chișinău joined the European Union’s Third Energy Package in 2011. The package seeks to liberalize gas markets, so that companies can no longer be allowed to both distribute and transport gas. Moldovatransgaz however failed to secure an operating license from Chișinău authorities due to its failure to submit the necessary documents in due time.
The signing of the lease contract between Moldovatransgaz and Vestmoldtransgaz was made possible first and foremost after Chișinău modified the relevant legislation, allowing the National Agency for Energy Regulation (ANRE) to kick off proceedings with a view to separating companies in the field of natural gas, without asking Moldovagaz for permission, in case the energy company would have said no.
De-monopolizing the gas market, an EU requirement allowing Moldova to curb its dependency on Russian gas
Moldova’s Energy Minister, Victor Parlicov, hailed the fact that the two parties managed to reach consensus without requiring the intervention of ANRE.
“Just like the time when the local energy market was brought in sync with the European markets, household users won’t be feeling the impact of this change affecting the gas market. However, this separation, which the Republic of Moldova has been postponing since 2012, is a huge leap in terms of transposing European legislation into national law and liberalizing the gas markets, making them more transparent. Therefore, we will secure indiscriminate access to the natural gas grid for all companies. In the long term, we will increase the credibility of this market for European traders and providers. The resulting competition will also generate better prices in the future”, Victor Parlicov said.
Economic journalist Ion Preașcă says that the Republic of Moldova’s adherence of the European Union’s Third Energy Package 12 years ago angered Moscow, which regarded the said directive as an action targeted against its state-owned gas corporation, Gazprom. The Moldovan journalist said that the fact that Vestmoldtransgaz now controls Moldova’s gas transport networks also solved an overdue requirement Moldova was supposed to implement as part of its European Union Association Agreement:
“The Republic of Moldova also risked infringement proceedings for failing to implement EU directives. Indeed, one of the biggest impediments in the way of implementing the European Union’s Third Energy package has been eliminated. This creates more opportunities and curbs the country’s dependency on a single gas provider, a single company. Most likely, we might also see a synchronization of Moldova’s energy grid with that of Romania, and by extension the European Union”.
Yet the discussion goes well beyond immediate energy or economic concerns. Political analyst Ion Tăbârță believes that Vestmoldtransgaz’s takeover of the Republic of Moldova’s gas transport networks is also an important step towards reducing the Russian Federation’s geopolitical influence in Moldova:
“We know for a fact that the Russian Federation has had a number of elements whereby it exerted leverage and influence in the Republic of Moldova. The main element was energy – Moldova’s full reliance on Russian gas imports and Tiraspol’s dependency on Chișinău in terms of electricity deliveries. It should be said that the Republic of Moldova’s energy reliance on Russia started waning once energy interconnections with Romania were set in place. First and foremost, the Iași-Unghen-Chișinău pipeline was rendered operational, and we can already see its strategic importance. The fact that Moldovagaz will no longer control gas transport pipelines, which are the property of the Republic of Moldova, is also one step closer towards achieving energy independence. There are additional aspects pertaining to electricity, but the Republic of Moldova is also taking action to secure its interests in this area as well. The building of the high-voltage line linking Isaccea to Vulcănești and then to Chișinău will also be a significant development, which would help the Republic of Moldova achieve total independence from the Russian Federation”.
Chișinău refuses to pay a 700-million-dollar debt to Gazprom, claiming it is bogus
Depriving Moldovagaz (a subsidiary of Gazprom) of its right to transport gas to the Republic of Moldova was followed by another announcement, which was somewhat to be expected, when Chișinău authorities admitted they owed Gazprom only 8.6 million USD of the total of 709 million USD the Russian energy giant demands.
Moldova’s Energy Minister, Victor Parlicov, said that an international audit carried out by Wikborg Rein from Norway and Forensic Risk Alliance from the UK revealed that Gazprom failed to produce documents attesting Moldova owns 276 million dollars, a debt the Russian company claims was accrued over 1991-2022.
Another 400-million-dollar debt is overdue according to both the Moldovan and the Russian legislations, whereas approximately 135 million USD were spent by Moldovagaz without approval from ANRE, according to the legislation in force, Parlicov went on to say.
President Maia Sandu said the Republic of Moldova has shown that the Russian Federation tried to use energy resources as blackmail, and that the debt demanded by Gazprom is non-existent. Prime Minister Dorin Recean said the Republic of Moldova has no intention to pay this debt.
In response, Gazprom highlighted that the said audit “cannot in any way influence the amount of this debt […], all the more so that the figure is confirmed by documents signed on a regular basis by Gazprom and Moldovagaz […] Gazprom firmly disagrees with the allegations made by the Moldovan side and intends to defend its interests by any means possible in the future”.
On the other hand, the United States hailed the completion of the independent audit commissioned by the Moldovan government. “It should come as no surprise that Gazprom could not substantiate the exorbitant bill that Russia expected the Moldovan people to pay. The United States reaffirms its support for the Republic of Moldova’s ongoing efforts to diversify its energy sources and ensure a more prosperous and transparent future for its people”, the US Department of State writes in a press release.
Political analyst Nicolae Negru believes the results of the audit puts the Russian energy giant in a tight spot.
“The audit has confirmed what some experts had been saying for a long time, namely that the Republic of Moldova actually owes nothing to Gazprom. This is actually an attempted fraud. Gazprom found itself in an embarrassing position. Moscow will find other ways to obtain this money, since it is a question of reputation too. Certainly, by ensuring its energy independence from Russia, Chișinău can now resist this blackmail, which will continue over the coming period as well”, Nicolae Negru argues.
Starting last autumn, the Republic of Moldova, more specifically the territory controlled by constitutional authorities in Chișinău, has stopped buying gas from Russia. Moscow continues to deliver natural gas only to the separatist region of Transnistria under its control, a region hosting Russian troops and an ammunition depot. Chișinău is currently procuring its gas on international markets. Part of this gas reserves are stockpiled in underground storage facilities in Romania and Ukraine. The moment it stopped delivering gas to Moldova, the Russian Federation apparently wanted to exert pressure on the current pro-European administration in Chișinău, forcing it to readjust its external policy eastwards. The Republic of Moldova seems to have made the current context work for itself, ending up buying gas at lower prices compared to Gazprom deliveries to Transnistria and now no longer relies on the Russian giant for gas imports.
Therefore, Moscow’s strongest leverage in the Republic of Moldova, energy exports, has lost traction in the last year and a half, and despite Russia’s best efforts, it has pushed Moldova further away from the Russian Federation and ever closer to the West.