Moldova asks Gazprom to extend the gas supply contract for at least a year while maintaining the previous pricing formula, which would allow the gas price to vary now from $220 to $280 per 1,000 cubic meters; nevertheless Chisinau is ready to sign a new gas contract.
Deputy Prime Minister, Minister of Infrastructure and Regional Development of Moldova, Andrei Spinu, announced this while speaking on the air of the InPROfunzime program on ProTV Chișinău. According to him, the parties are currently discussing how to solve a number of problems that have accumulated over time in the relations between Moldovagaz, Gazprom and Moldova as a whole, with the main ones being issues of paying off the historical around $450 million gas debt of consumers from the right bank of the Dniester to Gazprom, implementation of the Third European Energy Package in the gas sector, problems of tariff regulation. Andrei Spinu recalled that the current contract for gas supplies to Moldova was signed back in December 2006 for a period of 5 years, and after its expiration, it was renewed each time for different periods - a year, two or three. The last contract extension expired on September 30, and before that, Moldovagaz and the government had asked Gazprom to extend the contract for at least a year while maintaining the old pricing formula, which is considered profitable by Chisinau authorities in the current context, when gas prices on international markets are growing rapidly and increased already 4-5 times. “Since we have not completed all discussions on controversial issues, we have extended the contract for another month, until the end of October, and this month the gas price formula for the third quarter will be applied, although the formula for the fourth quarter should have been applied. We want to extend the previous contract with the preservation of the old formula, but we could also sign a new contract if we reach an agreement in this matter,” said Andrei Spinu. Commenting on the rapid rise in the price of Russian natural gas for Moldova in the past three months, which increased from $440 per 1,000 cubic meters in August, up to $550 in September and $790 in October, he explained that the contract between Moldovagaz and Gazprom contains a mixed formula for determining the gas price, hence, one formula is applied in winter and another one in summer. In particular, in the warm season, the formula is linked to the gas price on the German NCG exchange. The average last month’s gas price on this exchange is taken and used to pay for gas supplied in the current month. “It is known that now there is an anomaly in the market, there is a historical situation that did not exist before. Gas prices on exchanges set new records every day and have already risen to $1,100. Therefore, the average prices have also increased. As a rule, in the summer, gas prices decline on the stock exchanges, as consumption falls, but now the situation is abnormal, and prices, on the contrary, have jumped sharply and continue to grow. In winter, a different formula is applied, and when calculating gas prices, the average cost of petroleum products for the 9 months immediately preceding the quarter of gas supply is taken into account. If we calculated the price of gas supplied in October using the old formula, then its price would be $220 per 1,000 cubic meters, and gas cost in January-March 2022 would be $280. But since we only renewed the contract for a month, we agreed to buy gas at a price pegged to the German NCG exchange so that we have time to conclude all discussions. But we agreed to later discuss the recalculation of prices for gas supplied in October according to the previous formula, from the previous contract. Albeit, the current price of $790 in the current context is not the worst, given that now the price of gas on the exchange exceeds $1000,” said Andrei Spinu. He expressed the hope that in the end, by late October, the parties will be able to find a compromise and sign a long-term contract for gas supplies and ensure the stability of gas supplies at affordable prices. "We are ready to extend the current contract for at least 1 year while maintaining the previous formula and submit a “roadmap” for solving existing problems, including the historical debt," said Andrei Spinu. He noted that during negotiations with Gazprom, the debt of the Transnistrian region was not discussed. // 05.10.2021 – InfoMarket
