Last week saw new tensions building up in Chișinău, after on November 22, Gazprom issued an ultimatum to the government in the Republic of Moldova, compelling it to pay its outstanding 74-million-dollar gas bill for October and November within 48 hours. Less than a month after Moldova signed a new contract for the delivery of natural gas, Moscow proved it knows how to use its terms to its advantage. It is clear that Moldova’s energy problems are far from over, and the only medium- and long-term solution out of this deadlock is to diversify its suppliers.
Gazprom delivers gas to its subsidiary while Moldova foots the bill
The contract was signed between Gazprom and Moldovagaz, in which the Russian energy giant holds two thirds of the shares. Basically, the Moldovan energy company is a subsidiary of Gazprom. This time, apart from the contract, the two parties also signed a negotiation protocol, with Andrei Spânu, deputy prime minister and minister for infrastructure and regional development, signing the document on behalf of Moldova.
The government has so far refused to make public the terms of the contract or the method for calculating the price – which in October stood at 790 USD per thousand cubic meters of gas, a price very close to the one on the free market – claiming this is a trade secret. The authorities did publish the negotiation protocol, which under Article 8, above the signature of Andrei Spânu himself, stipulates that the Republic of Moldova will make sure it has the necessary financial resources to pay the gas bill. Basically, the government pledged to pay for the gas that Gazprom delivers to its own company, Moldovagaz.
The protocol in question does not reveal, however, when exactly the Republic of Moldova is expected to pay its outstanding debt. One thing is certain: a 48-hour deadline to pay 74 million USD for a state such as the Republic of Moldova, with a GDP of 12 billion USD, is not exactly a walk in the park. When everybody thought the Republic of Moldova signed just an unfavorable contract, in fact the lack of transparency of the documents signed by Andrei Spânu makes the Republic of Moldova the target of constant harassment from Gazprom, and by extension, the Kremlin.
Moreover, on November 24, Spânu told the media that the method of payment was never brought up during negotiations for the new contract, since it was stipulated in previous contracts. In other words, a specific deadline for paying gas bills was never included in the contract signed by Andrei Spânu and the head of Gazprom, Alexey Miller, on October 29 in Saint Petersburg.
Still, the Russian Federation again interpreted unilaterally the new contract signed by Gazprom and its subsidiary, Moldovagaz, with the blessing of the government in Chișinău.
“The Good Samaritan” at Gazprom
Furthermore, Gazprom spokesman, Sergey Kupriyanov, actually dared mock Chișinău in political terms for its failure to pay its outstanding debt. He made a statement at the Russian TV station NTV, which is how the public in the Republic of Moldova actually learned about the existence of deadlines for the payment of its gas bills.
Kupriyanov referred to certain favors that Russia is doing the Republic of Moldova by extending the deadline until Friday, October 26. “As an exception and a sign of goodwill, knowing the difficulties this might create for the citizens of Moldova, Gazprom agreed” to extend the deadline until Friday, the Russian energy giant spokesman said.
Kupriyanov added that Gazprom expects the government in Chișinău to strictly honor the terms of the contract in the future and fulfill its payment obligations in due time.
Even after Moldova paid its energy debt last Friday, Kupriyanov said that “throughout the week, the Moldovan authorities made a public show of how they are saving the country and decide to disburse additional funds for paying its outstanding debt to Gazprom. There is hardly anything new about this. Making due payments as per contractual obligations is something normal”.
“At the same time, the very fact that the government had to make more funds available in order to foot its energy bills signals systemic problems in Moldovan energy sector. This means we may be facing a new similar crisis in the future”, the Gazprom official went on to say. In other words, similar episodes will happen again, and Moscow will be able to capitalize on Moldova’s future hesitations in this respect to gain political leverage.
Although the payment of energy bills is a strictly commercial issue, the Russians will use every opportunity and every delay to launch new political attacks to discredit the pro-European administration in Chișinău. Despite Kupriyanov’s statements, the minister of infrastructure, Andrei Spânu, told Europa Liberă in an interview on November 25 that “the third objective we’ve pursued during our talks [with Gazprom] was to rule out any political ingression that might prove detrimental to the Republic of Moldova”.
Not even the latest visit to Moscow of Moldova’s Foreign Minister, Nicu Popescu, was able to help bring relations with Russia back on track. Meanwhile, the Russian Federation remains hostile to the current pro-European government in Chișinău. As a matter of fact, in late November a new Moldovan-Russian mixed government session was supposed to take place, but was delayed upon Moscow’s request for early next year, considering that these meetings are also stipulated in the protocol signed by Spânu and Miller in Saint Petersburg. Therefore, Russia interpreted the provisions in the new contract and the commitments in the signed protocol as it pleased.
The ultimatum issued ahead of Maia Sandu’s visit to Bucharest
What is interesting to note is the timing chosen by Gazprom to issue an ultimatum on November 22: exactly one day before Maia Sandu’s scheduled visit to Bucharest. The delegation also included Nicu Popescu and Andrei Spânu, namely two ministers that paid state visits to Moscow in the previous couple of weeks. If Russia failed to bring Maia Sandu to Moscow at least symbolically, then the Kremlin decided to issue an ultimatum on the eve of Maia Sandu’s planned visit to Bucharest, where energy would obviously rank high on the agenda for talks.
In Bucharest, Maia Sandu referred to the possibility that the Republic of Moldova might stockpile large quantities of gas in deposits in Romania, which it could later tap into. Still, a series of questions arise in this respect, of which the most important is: why isn’t the Republic of Moldova buying gas from Romania as an alternative source, albeit at a higher price? For instance, Andrei Spânu admitted in his interview for Europa Liberă that the Republic of Moldova wants to break the electricity monopoly, considering that right now Moldova procures its electricity from the Cuciurgan power plant in separatist Transnistria. Of course, the dumping price offered by Cuciurgan cannot be outmatched, since this power plant, owned by the Russian company Inter RAO, doesn’t pay a cent for the gas delivered by Gazprom.
Still, Spânu says the Republic of Moldova is considering to procure 70% of its electricity input from Cuciurgan starting March 31, 2022, when the current contract is set to expire, while the remaining 30% will be procured on the Ukrainian market.
Why, then, Moldova won’t do the same with natural gas, considering that Romania, by means of Transgaz and European institutions that funded the building of the 160-km pipeline (linking Ungheni to Chișinău), remains a source of untapped potential? Even if the Republic of Moldova paid more for gas deliveries from Romania (which at any rate can be delivered from multiple sources), at least it would have a backup solution in times of crisis, which would significantly lower the possibility of Gazprom resorting to its current energy blackmails.
Therefore, the Republic of Moldova needs at least two supply sources, both for natural gas and electricity. Even if the market prices were higher for the alternative sources compared to those provided by Russia, at least the leadership in Chișinău would find it easier to deal with Russia’s energy blackmail, an important leverage that Moscow uses to obstruct the activity of the current pro-European government.
Moldova risks facing constant harassment by means of such guerilla-type political actions aimed at smearing its public image. Suffice it to acknowledge the fact that the latest gas crisis has delayed the progress of reforms by over a month, to realize that Russia is playing the destabilization card and will continue to fuel similar crises in Chișinău remotely.
This gordian knot must and should be severed as swiftly as possible, even at the expense of more costly solutions. Otherwise, lawmakers in Chișinău risk investing their energy and resources in endless artificial quarrels with Russia aimed at sidetracking Moldova from achieving the goals of the governing program that earned PAS and Maia Sandu landslide victories and their term in office. The ball is now in Chișinău’s court, and it will have to up its game if it wants to outsmart the Kremlin in the energy game. And if, for various reasons, some of the ministers in the new cabinet refuse to do it, then a reshuffle may not be such a bad idea after all.