Moldovagaz

Moldovagaz Joint Stock Company is one of the energy enterprises of the energy complex of the Republic of Moldova.

The activities of the enterprise and its affiliates are aimed at providing services for the supply, transportation and distribution of natural gas to individuals and legal entities of the Republic of Moldova, as well as the transit of natural gas in the Balkan direction.

History

2023

Transfer of management of the country's gas transmission networks to Romanian Transgaz for 5 years

Since September 2023, Moldovan GTS for five years came under the management of Vestmoldtransgaz, which is 75% owned by the Romanian company Transgaz and 25% by the European Bank for Reconstruction and Development (EBRD).

The Romanian company Transgaz also owns the Iasi-Ungen gas pipeline, and Chisinau 58% of its shares are owned by the government. Romania

It is through this gas pipeline that Moldova is trying to reorient itself to gas supplies from Europe so as not to directly purchase all gas from the Russian Gazprom.

Earlier, the Moldovan GTS were managed by Moldovagaz, the main shareholder of which is Gazprom.

As part of the third EU energy package, Moldova has pledged to divide supplies, transportation and distribution in the gas market.

However, in June 2023, Moldovagaz reported that they did not have time to complete the certification process and separate the new Moldovatransgaz company from the parent company.

The government indicates that the signing of an agreement on the lease of a GTS to a Romanian company was allowed by some decisions of the Emergency Situations Commission, as well as the law approved in July on the procedure for revoking the license of the GTS operator (i.e. from Moldovagaz) and transferring its assets to another company.

Refusal to recognize debt to Gazprom for $709 million

In September 2023, Moldovan President Maia Sandu said that international auditors hired by the government did not reveal Moldovagaz's debts to Gazprom.

The next day, September 6, was followed by an official statement by the Moldovan government following an audit conducted by the British company Forensic Risk Alliance & Co and the Norwegian Wikborg Rein Advokatfirma AS, which received 800 thousand euros from the country's Reserve Fund for their work.

By the way, it was the Norwegian company that helped Naftogaz Ukrainy in international arbitration in a dispute with Gazprom, which the Russian company lost in 2019.

"The international audit did not reveal all documentary evidence of Moldovagaz's debt to Gazprom of $709 million," said Moldovan Energy Minister Viktor Parlikov. He said that Moldovagaz should pay Gazprom $8.6 million of the $709 million debt, and challenge the rest in court.

Earlier, President Maia Sandu said that Moldova has no historical debts to Gazprom, according to the results of the audit, "the debt to Gazprom has not been identified."

In 2021, the Moldovan government concluded a new gas agreement with Gazprom. One of its conditions is an audit of Moldovagaz's debt to Gazprom, which the Russian side estimated at $709 million. At the end of 2022, the Moldavian Accounts Chamber counted a debt of $591 million.

However, the Sandu administration decided to entrust the audit to foreign companies, which, contrary to the logic and financial documents of the Moldovan company, came to the conclusion that there was no debt at all.

For such a simple conclusion, "independent" auditors took a year: an audit contract with the British and Norwegians was signed in August 2022. At the same time, the timing of its announcement was constantly postponed.

Sandu says that in 2021, her team could not agree to pay a debt of $709 million due to an excessive burden on the country's budget. However, last winter Moldova was able to afford to buy the same Russian gas through European intermediaries at inflated prices, which only aggravated the socio-economic crisis in the country.

Agreement with Pridnestrovie on the purchase of electricity produced from Gazprom's gas

Moldovagaz transfers 5.7 million cubic meters of gas from Gazprom to Tiraspoltransgaz in Transnistria to generate electricity at the Moldavian State District Power Plant (owned by Inter RAO). The agreement with Transnistria made it possible to sign a new contract for the transmission of electricity from the unrecognized republic, which will satisfy most of Moldova's needs and significantly reduce the need for the purchase of expensive electricity in Romania. According to the new agreement, the price of 1 MW of energy from Transnistria is €73.

2022

Government loan to pay for gas to Gazprom

In October 2022, it became known that the Moldovan authorities would allocate a loan to Moldovagaz secured by the country's gas transmission system so that the company could pay off Gazprom on time without the risk of stopping supplies, said Deputy Prime Minister and Minister of Infrastructure Andrei Spynu.

Gas Debt $709 Million The country is not ready to pay and is waiting for a shutdown

On April 11, 2022, Moldovan Deputy Prime Minister Andrei Spynu said that the republic was not ready to repay Gazprom, so it could be cut off from gas supplies on May 1. The republic's debt for gas is estimated at $709 million.

Introduction of a state of emergency due to lack of funds to pay for gas

In January 2022, Moldova introduced a state of emergency for 60 days after Gazprom was notified of the cessation of gas supplies from January 21. During this period, the authorities will be able to introduce normalized consumption of natural gas and other emergency measures. Gazprom previously notified Moldovagaz that it would stop gas supplies if it did not receive another payment by January 20.

2021: Extension of the contract with Gazprom for 5 years

In October 2021, Gazprom proposed that Moldova adjust the free trade agreement with the EU and postpone the energy market reforms agreed with Brussels in exchange for cheaper gas for the country.

Sources with knowledge of the talks said the Kremlin sees the gas talks as part of a broader political settlement with Moldova.

Market analysts believe they are Russia using Gazprom's position as Moldova's sole gas supplier to pressure the government, Chisinau which has vowed to withdraw from orbit to the Moscow West.

EU diplomats have urged the country not to sign a new long-term treaty with a Russian company, but instead to find short-term solutions to survive the winter.

Moscow does not present Chisinau with political conditions for the resumption of gas supplies to Moldova, said presidential spokesman Dmitry Peskov.

No, there are no political moments and there can be no. This is exclusively commercial negotiations, he said at a briefing. There is a need for gas, there is a commercial offer, there is a proposed discount, there is also a problem of accumulated debt. All this is absolutely commercial applied. There is no politicization here and there can be no

On October 29, 2021, it became known that Gazprom and Moldova extended the contract for gas supplies immediately for 5 years. Deliveries will begin on November 1.

So far, details about the price, volumes and conditions are unknown. But it is stated that the formula proposed by the Moldovan side will be used to calculate the price of gas. Debt will also be audited and a payment schedule will be set.

Moldova said that Russian gas will cost less than any other sources. Alina Merlich, adviser to Deputy Prime Minister and Minister of Infrastructure of the country Andrei Spynu, noted that prices will be lower than market prices.

2020: High dependence on Russian gas

Зависимость ряда the European countries from Russian gas, data for 2019 and 2020