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Energy crisis averted? Russia begins pumping gas to Moldova under new contract in wake of shortages & standoff over unpaid bills

On Monday, the firm began re-supplying the Eastern European nation after a new contract was negotiated, extending a previous deal for another five years.

Prior to that, volumes of gas had been decreased and there had been warnings that deliveries could stop altogether if a new agreement was not signed by December.

Moldova will receive around three billion cubic meters (bcm) of gas per year, Moldovan Deputy Prime Minister Andrei Spinu said on Monday, in line with a contract signed recently with Russia following a dispute in which Moscow threatened to stop supplies.

The deal will use the same route as before, with gas flowing through the network of Soviet-built overground pipes across Ukraine.

Gazprom announced the agreement last Friday, saying it was struck “on mutually beneficial terms,” having previously warned that any future contracts were dependent on Moldova settling outstanding unpaid debts for past imports. The company reportedly agreed to a pricing deal put forward by the Moldovan side.

The new agreement confirms that Moldova will be subject to an audit of its debt in 2022.

Following this, both parties will come to an agreement on how to manage repayments.

The country’s president, Maia Sandu, has said that her government is satisfied with the deal.

Kremlin Spokesman Dmitry Peskov said last week that negotiations with Chisinau were continuing, but the debt of $709 million was standing in the way of any potential new contracts.

“So far, the de facto situation is that they failed to reach an agreement. Moldova has a debt to Gazprom; the debt is quite serious, it is increasing,” he said.

“There is a question related to this debt, the question of a new contract. There is a seller, there is a buyer. The terms of the contract must be agreed; if opinions do not coincide, then nothing can be done. But, of course, Gazprom is open for further contacts and a search for mutually acceptable solutions.”

Gas shortages had reached crisis point in Moldova in recent weeks, and the country had declared a state of emergency over the situation. Consumers faced steep price hikes and shortages as talks stalled.

Following the decision, Moldova announced it had begun importing gas from Poland as part of a trial scheme to explore alternative sources, representing the first time that the former Soviet Republic had bought supplies from somewhere other than Russia. However, analysts were quick to point out that the unit costs were likely to be higher than those offered by Russia, and that imports made up only a small fraction of the gas the country needed.

Source: RT