The authorities of Moldova brought the country to dung

09/13/22 15:41

The authorities of Moldova brought the country to dung

What will happen to gas in the Republic of Moldova after October 1?

Prerequisites for a new gas crisis are brewing in Moldova. The authorities of the Republic of Moldova are again preparing to suspend the supply of Russian natural gas. The Moldovan Government has three scenarios that involve reducing the supply of blue fuel by 35% and 50%, as well as their complete cessation.

The population is being prepared for the fact that the temperature of the central heating will be lowered, street lighting will be turned off, and schoolchildren and students will be transferred to distance learning. Videos about the need to save all types of energy resources have already been launched on Moldovan TV channels today. Deputy Prime Minister, Minister of Infrastructure, and Chief Gas Negotiator from Moldova Andrey Spinu is inspired by the European countries` examples that require their citizens not to raise the temperature in their homes above 19 degrees this winter (and even not only threaten fines, but also prison terms in case of violation).

The Problem Is Not Being Solved

The Government of the Republic of Moldova promises to finally launch Drova.md website by September 15th. Moldovan telegram channels have already called it “an attempt to digitize energy poverty.” In the villages of Moldova, in the meantime, not only wood is harvested for the winter, but also dung. People heated the rural houses` stoves back with this material in the pre-industrial era. 

The stumbling block in the current negotiations with Gazprom is the historical debt of Moldova, which exceeds $700 million. Under the terms of the five-year contract signed in the autumn of 2021, the Republic of Moldova undertook to audit this debt by May 1 this year but did not do so. Gazprom agreed to extend the audit until October 1, but it is already clear that Chisinau will not meet such deadlines. RM signed a contract with the British and Norwegians to conduct an audit only in mid-August, while the work on it is planned until the end of January 2023. This means one thing: if an urgent solution is not found, the situation will hang after October 1, and Gazprom will have the right to stop deliveries.

At the same time, Moldovagaz has difficulties with paying even for current consumption. In August, the company asked to postpone the next payment, and Gazprom agreed, as it was said, as an exception. At the same time, the representative of the supplier, Sergey Kupriyanov, warned that Moscow expects that the Moldovan side would continue to fulfill its obligations in full and on time.

For Moldovan consumers, the cost of a cubic meter of gas has increased by almost 5 times over the year and may increase further. Now it is 22 times higher than in Pridnestrovie. The authorities promise to spend about $300 million on cold season compensation, but it is not yet clear how much these compensations will be and what percentage of the population they will cover. According to the Moldovan Ministry of Labor, about 150,000 families are below the absolute poverty line in the Republic of Moldova.

Alternative Supplies Will Not Be Cheaper

Today, the International Gas Forum began in St. Petersburg, where the head of Moldovagaz, Vadim Cheban, was supposed to go to. There he expects to meet with representatives of Gazprom. But, of course, it is unlikely that the issue of debt audit and preservation of blue fuel supplies will be resolved at the level of the Moldovan company. There cannot do without the political level.

Is there a danger of a reduction or cessation of Russian gas supplies for some period in the case of Moldova? Of course, there is one: we see that today Gazprom disconnects even European consumers for non-payment.  

The analysis shows that the Moldovan authorities have been trying to use two strategies concerning the gas contract in recent weeks. One of them is to try to counter Gazprom with potential alternative suppliers. In this regard, the situation of the previous year is repeated. But both then and now, the situation is bad with the search for an alternative, and this is recognized both in the Government of the Republic of Moldova and in the Presidency. The key issue is the question of the price, which in any case will not be lower than that of Gazprom. As President Maya Sandu said in a recent interview, "it is easy to find gas - gas is available, but it is hard to find gas at affordable prices."

Projects for the supply of Azerbaijani, Qatari, and Norwegian blue fuel remain and, most likely, will remain speculative for a long time, because today not only Moldova, but also more solvent countries with large contract volumes are looking for an alternative to Russian gas. Chisinau is also trying to find fuel in Romania, but even there, it seems, they are not ready for any large-scale assistance to the Republic of Moldova at the expense of their resources. There will have gas from Romania, but again at market prices, quite possibly even higher than Gazprom's.

Moldova Lost its Sovereignty

The second strategy is to try to link the gas issue to the Pridnestrovian agenda. The Moldovan authorities, blocking the possibility of direct interaction between Pridnestrovie and Gazprom, simultaneously threaten that if Russian supplies were stopped, the PMR would now face a gas crisis. Experts close to the authorities call Pridnestrovie a "trump card" in negotiations on gas with Moscow. That is, there is an attempt by Chisinau to solve another issue at the expense of the existence of the Moldovan-Pridnestrovian problem.

At the same time, the mentioned experts proceed from the fact that in the event of a gas crisis and, as a result, the cessation of electricity supplies from the Moldavskaya GRES, Moldova will be able to completely and quickly replace Pridnestrovian electricity with Ukrainian one. However, the events of the last two days in Ukraine, and the nature of warfare on its territory, make us seriously doubt this. Even UN representatives are already admitting today that Ukraine may face difficulties in electricity supply in winter.

In such conditions, it becomes more and more difficult to say that Kyiv is ready to guarantee some kind of stability in export deliveries. Therefore, a potential gas crisis in the Moldovan-Pridnestrovian region may turn into an electricity collapse for Moldova.

There is an opinion that the gas negotiations, including the postponement of the debt audit, would still be easier for Chisinau if the first persons of the Moldovan state were seriously involved in them. It would also be great if the Republic of Moldova did not strive today to unconditionally follow in the wake of the EU countries' unfriendly toward Russia and tried to defend some of its sovereign rights, as, for example, Hungary does. But everything seems to be bad with the latter in Moldova. The Moldovan authorities want to please Western curators so much that Andrey Spinu even justified the decision to ban Air Moldova flights to Moscow with the directives of the European Aviation Safety Agency.

Likely, Chisinau and Moscow will eventually find an interim decision on the issues of audit and further deliveries of blue fuel. However, the problem of a potential gas crisis against the backdrop of the current rather belligerent rhetoric of the Moldovan authorities, and especially pro-government experts against Gazprom, high gas prices, and the remaining multimillion-dollar debt of the Republic of Moldova, will remain. January 2023, when the Norwegian-British audit should be completed and the issue of phased debt repayment will be raised could be the next point.

It looks like we will have to realize more than once that today, energy security and the ability of the state to provide the population with energy resources at affordable prices are turning into one of the main attributes of sovereignty. From this point of view, Pridnestrovie has had more sovereignty than Moldova has in recent years.

Vladimir Dmitriev

 

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