Page 7 - FSUOGM Week 43 2021

FSUOGM COMMENTARY FSUOGM

The Kuchurgan power
plant in Transnistria
provides much of
Moldova's power supply
and is Russian-owned.

indexation. Not only is Gazprom the main owner of GTSO
According to Interfax sources, Gazprom Moldovagaz, but another Russian company Inter
has offered Moldova “a fair market price with RAO also controls the Kurchurgan power plant
an additional 25% discount” on supplies. But it that supplies most of the country’s electricity. It
has asked Moldova in return to pay off around has exploited its dominant position in Moldo-
$700mn of debt it has accumulated on gas pur- van energy to slow down market reforms and
chases over the past three years. Moldova says it prevent the country from accessing alternative
does not have the funds to pay off this debt, and sources of energy.
it is seeking a 50% discount on gas supplies, the However, it is harder to argue that Gazprom
news agency has reported. can be blamed for the current situation in Mol-
“In these conditions, the conclusion of a dova. After all, it was Chisinau that asked to pay a
new long-term gas contract before November hub-based price for gas rather than sticking with
1 is highly doubtful and there are high risks of oil indexation. Moldova also delayed signing a
a complete cessation of Russian gas supplies to new long-term contract for several years, as it
Moldova after this date,” a source close to the was holding out for more lucrative terms.
negotiations told Interfax. The good news for Moldova is that Ukraine
has promised to lend some gas to the country,
Who’s to blame and Chisinau is continuing talks to obtain some
Gazprom has faced criticism for the situation supplies from Poland and Romania. A new pipe-
in Moldova and for exacerbating the broader line to bring Romanian gas all the way to Chisi-
European energy crisis. EU lawmakers want the nau is almost ready.
European Commission to investigate the Rus- This said, gas markets are tight across Europe
sian company for abusing its dominant position and it is unclear whether its neighbours can pro-
in the European gas market, and the Commis- vide enough supply to avert heating and electric-
sion itself has said the crisis has geopolitical ity outages. And as it is not an EU member, there
undertones, referring to Russian activity. is nothing to compel these countries to send gas
European Commission President Ursula von to vulnerable consumers in Moldova.
der Leyen on October 21 even described what Regardless of whether a new contract is
was happening in Moldova as a case study in signed with Russia by the end of the month or
how Russia uses gas as a geopolitical tool. not, at this stage Russia will not have the time to
book sufficient transit capacity through Ukraine
It is true that Russia has sought to maintain to cover supplies in full during November. Short-
control of Moldova’s energy sector over the years. ages are therefore set to persist. ™

Week 43 27•October•2021 www. NEWSBASE .com P7