Another gas crisis between Russia and Moldova

The crisis started, as they usually do, a couple of weeks before the expiration of a long term contract signed between a national gas company and Gazprom. In this precise case, Moldovagaz was told that deliveries will stop at the expiration’s date, on 30 September, if it did no sign a new contract and settle its debts. The date was extended by a month to give chances to the negotiation, but the supplies were cut by a third. After this date, said Gazprom, they will be cut. 

Ambiguous agreement 

By the end of October, the Moldovan delegation (Deputy Prime Minister Andrei Spinu and Moldovagaz head Vadim Ceban) and Gazprom CEO Alexei Miller met almost daily in St Petersburg. At the last hour, they came with an agreement to sign a new five-year contract. Moldova will buy gas from Gazprom at around $450 per 1,000 cu.m., half the market price and below the price paid in October ($790). But the agreement includes points on which the understanding of the two sides might quickly diverge, mostly the possibility to modify the prices during the contract according to a ratio based on market prices of gas and oil; and the settlement of Moldovagaz’ huge debt to Gazprom. 

The partners agreed to conduct, in 2022, an independent audit on that debt, estimated by Russia at around $709 million (a figure contested by Moldova), and then negotiate a repayment schedule. But this left aside the highly sensitive political topic of an additional $3bn debt consisting of unpaid bills for Russian gas deliveries to the Transniestr breakaway region that Moscow allowed to pile up for decades. No wonder that, when he declared that the agreement was non-political, Spinu insisted that the protocol he signed with Miller “makes no mention of the Dniester region”. This is a political minefield, because Moldova’s refusal, or endorsement, of Tiraspol’s debt will be received as an indirect signal about the new pro-EU leadership’s vision of the Moldovan state: reintegration of Transniestr region into one single state (but how?) or negotiations for a new status inside Moldova (with whom?).  

Kremlin’s moves 

The Kremlin too was keen to describe the deal as purely commercial, not political. This might only be true if one considers that, indeed, the Kremlin moved from the post-Soviet epoch, when prices of energy deliveries were linked to the diplomatic support of the new republics to Russia, or later preferential access for Russian companies in case of privatisation. Now, Gazprom deliveries and debts provide the background for a peculiar set of geopolitical games between Russia and the West. But Gazprom is first of all looking for profits. 

In this crisis with Moldova, the goal of the Kremlin was not so much to punish a new pro-European Moldovan leadership turning towards the EU, or even NATO. It was the opportunity to send a message to its traditional partners: pay attention to the risk, and cost, of miscalculating what Russia can provide compared with what the West really does, deeds not promises. Since early January, the young president Maia Sandu has been courted at all EU levels and has been entitled to believe that Brussels will back her against Gazprom. Her country declared a state of emergency in the energy sector and, for the first time in its history, started buying gas from other than Russian sources.  

President Sandu had sent to Brussels prime minister, Natalia Gavrilita, who took office in August and vowed closer ties with the EU. Her mission consisted in seeking supplies from EU countries. She knew that many officials in EU Commission and members states have been blaming the Kremlin for the skyrocketing prices of gas. But they were, and still are, making huge budgetary efforts to alleviate the weight of energy bills on their own citizens and to prevent social troubles. In those conditions, Moldova can access to alternative European sources, when it is sustainable, without discount, nor free transport. EU said on 28 October that it would allocate 60m euros to help the poor country to secure uninterrupted gas deliveries.  

Difficult negotiations 

Contrary to its expectations, the fact that Moldova had signed EU Energy Packages did not benefit it, despite claims by president Sandu that the real intention of the Kremlin was to obtain Moldova’s withdrawal from the Packages. Even the champions of “EU security energy” against “Gazprom monopoly” were restrained by budget and industrial realities. Moldova bought 3.5m cu.m. of gas from the Polish state-owned PGNiG, the Dutch-Swiss Vitol and Swiss-registered DXT companies. Romania, itself faced with energy problems, offered less than half of it. Ukrainian president Zelensky, whose energy sector is expecting huge EU and German aid to upgrade its infrastructures, proposed to “divert” gas to Moldova “as a sign of solidarity between Europeans”. Then the “sale” of 0.5m cu.m to Moldova was requalified into a “loan”. 

This hardly compares with the 3.05 billion cubic meters of gas Gazprom delivered to Moldova in 2020. Nor pay enough attention to the structure of Moldovagaz, which is a joint Russian-Moldovan company set up by Gazprom, the Moldovan Government, and the Ministry of Industry of Transniestr. 

This is why, in the meantime, discreet contacts with Gazprom had intensified. The day of president Zelensky’s phone conversation with his Moldovan counterpart, Moldova’s delegation was already in St Petersburg for signing the agreement with Gazprom. 

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