Moldovagaz JSC asked Gazprom by the end of September to extend the current contract for the supply of natural gas to Moldova for several more years.
This was announced by Vitalie Turcanu, Deputy Chairman of Moldovagaz Board. He noted that, it is planned to extend the contract on favorable terms for our country, including by taking into account the current conjuncture of the oil and gas market. He also recalled that if we compare the purchase prices from Gazprom and quotations at the hubs, then, taking into account the costs of gas transportation, in 2020, Moldovagaz saved more than $40 million thanks to contractual relations with a Russian supplier. Vitalie Turcanu drew attention that today, against the backdrop of restarting economies, cold winters and especially cold spring, gas reserves in underground storage have dropped to a record low. As a result, this led to a tangible increase in prices at hubs, and today they consistently exceed $300 per 1,000 cubic meters. The transfer by companies of many of their employees to remote work has led to an increase in energy consumption by owners of private households. As a result, the consumption of natural gas as a source for electricity generation has increased worldwide as a whole. This factor also influenced the growth in demand and, as a result, prices. It should be noted that in December 2006 Gazprom and Moldovagaz signed a mid-term contract for the supply of Russian gas to Moldova and its transit, and upon the expiration of the document, the parties did not sign a new contract, but regularly renewed the old one (since 2012). In December 2020, the parties signed amendments to the existing contracts for the supply and transportation of gas, extending their validity until September 30, 2021. Earlier, the National Energy Regulatory Agency of Moldova (ANRE) reported that on January 15 of this year it approved the annex signed at the end of December 2020 by the Moldovagaz and Gazprom companies on the extension of the contract for the purchase of gas until September 30, 2021. As noted by ANRE, the contract was extended until September 30, 2021, and thereafter, the duration of the contracts must correspond to the “gas year”, which, in accordance with the provisions of the Gas Networks Code, includes the period between the first gas day of October of this year and the first gas day of October of the following year. According to the current contract, the cost of Russian natural gas for Moldova is calculated on a quarterly basis using a European formula that takes into account the price of gas sold by Gazprom to non-CIS countries over the past 9 months. In addition, when calculating the cost of gas for Moldova, the dynamics of the price of gas oil and fuel oil for the 9 months immediately preceding the quarter of gas supply is taken into account. The average purchase price of natural gas for Moldova in 2020 amounted to $148.87 per 1,000 cubic meters, having decreased by 36.3%, compared to 2019. Such data are contained in the report of the National Energy Regulatory Agency on activities in 2020. // 13.07.2021 - InfoMarket
