Page 13 - FSUOGM Week 36 2019

FSUOGM POLICY FSUOGM
Moldova secures Russian gas price discount
MOLDOVA
Moldova is bracing for potential supply risks next year.
MOLDOVA has secured a discount on natural gas supplies starting next month, its president Igor Dodon said on September 7 following talks in Moscow with his Russian counterpart Vladimir Putin.
The Balkan country buys almost all of its gas from Russia under a long-term contract, with shipments reaching 2.9bn cubic metres last year. It currently pays $235 per 1,000 cubic metres for these supplies but has been pressing for a price cut.
“We have agreed in principle and approved the next steps of co-operation in the gas sector, which allows me to say that [gas] tariffs for end userswillnotrise,”Dodonwroteonsocialmedia on September 7. The price of Russian gas will fall $10-15 next month, with further reductions of $40-50 on January 1 and $70 on April 1 next year also possible, he later told a briefing.
The Russian side has not confirmed any such agreements, however.
“The talks with Dodon did touch upon the gasissue,”KremlinspokesmanDmitryPeskov told TASS later that day. “In general, the sug- gested parameters are appropriate. Some final issues are to be negotiated at the level of experts.”
Meanwhile, Moldova has requested an urgent loan from the EU to cover gas imports next year, its economy ministry revealed on September 4.
Dodon travelled to Brussels last week to hold talks with EU officials. Accompanying him was Moldovan Economy Minister Vadim Brinzan, who held a meeting with the European Com- mission’s Deputy Director General for European Neighbourhood and Enlargement Negotiation Policy, Katarina Mathernova. During the meet- ing, the pair discussed the issue of an emergency loan from the EU to help Moldova cover the pur- chase and storage of around 400mn cubic metres of gas in January and February of next year, the ministry said in a statement.
Moldova receives all of its Russian gas via Ukraine, but the ten-year gas transit contract between Moscow and Kiev is due to expire at the end of this year. The two sides are yet to make progress agreeing a new contract to replace it. Moldova’s long-term gas supply deal with Russia is also scheduled to terminate on December 31.
Moldova could presumably use any funding granted by the EU to import non-Russian gas via Ukraine, in the event that these contracts are not renewed. It could also store purchased gas in Ukraine’s underground gas storage (UGS) sys- tem, as it lacks any UGS facilities of its own.
Moscow and Kiev are almost certain to strike a new transit agreement, however, as Gazprom does not yet have to pipeline capacity to replace Ukraine as a transit route, given delays at its Nord Stream 2 and TurkStream projects. Meanwhile, Moldova has no short-term alternatives to Rus- sian gas, and so will have to enter into a new sup- ply contract.
Further ahead, Moldova wants to diversify itsgasmixbyimportingupto1.5bcmofannual supplies from Romania via a new pipeline that will run to its capital Chisinau. But an invest- ment report published by Romanian gas opera- tor Transgaz in July suggested the pipeline would not be ready until 2021. Moldova has also signed an agreement with Ukraine on upgrading bor- der metering stations, allowing both countries to tap Romanian gas by reversing the flow of the Trans-Balkan pipeline.
Trans-Balkan is currently used to flow Rus- sian gas to South-east Europe and Turkey, but Gazprom has indicated it may stop using the route after the launch of the second TurkStream string in 2020-2021. With Trans-Balkan’s rever- sal, it is unclear whether a new Moldova-Ro- mania pipeline is necessary. A key question affecting both projects is whether Romania will have enough spare gas to export, given delays at its Black Sea gas fields. ™
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