HomeMediaLatest NewsThe experiments with gas from Europe will freeze Moldova

The experiments with gas from Europe will freeze Moldova

06 November 2022

Kondratiev Sergey V. Principal Director on Economic Studies, Head of the Economic Department

Sergey Kondratiev, Deputy Head of the Economic Department of the Institute for Energy and Finance, commented to Vzglyad.ru on gas supplies to Moldova.

“The myth that Moldova can only import gas from Russia has been dispelled. The day before, we imported natural gas for the first time through a reverse system - from west to east. On Wednesday, the state-owned company Energocom purchased 5.6 million cubic meters of gas, which were transferred through the Budnice point in Slovakia on the border with Ukraine,” Moldovan Deputy Prime Minister, Minister of Infrastructure and Regional Development Andrei Spinu wrote on Telegram.

Sergey Kondratiev suggested two possible explanations for what could be at stake. First, Moldova bought gas from traders from Slovakia, so the supply is recorded on paper as from this country. But in reality it was a physical reverse of gas from Romania. These are the only physical reverse deliveries that are possible, because gas flows from Ukraine to Moldova are an averse, that is, a direct mode of supply, the expert explains.

The second option that can be assumed is that this is not a physical reverse, but still a virtual reverse.

“Companies from Slovakia, Poland and Germany still have some gas in UGS facilities in western Ukraine. Slovakia could sell this gas from Ukrainian UGS facilities to Moldova, which was supplied to the republic through the existing pipeline system. Then there is no news at all. This is the standard situation. Moldova simply entered the gas market at a good moment, when prices fell below $1,000 per thousand cubic meters, which is two times lower than the peak values. Although for the poor economy of Moldova, this is still an exorbitant price,” Kondratiev says.

The reality is unpleasant for Moldova: it has nothing to replace Russian gas with. Not only will any other gas be very expensive, but it is also physically lacking.

Moreover, Moldova faced the question of finding new electricity suppliers. Until recently, Moldova was in an interesting energy alliance with Transnistria. The republic received Russian gas, used it to generate electricity at its state district power station. And the buyer of this electricity was Moldova.

“But the flow of gas from Russia has decreased not only to Moldova, but also to Transnistria. Therefore, Chisinau also needs a new electricity supplier. Recently, Ukraine could become it, but now this is unlikely to happen. In neighboring countries - Romania, Bulgaria, Hungary - the situation with electricity is approximately the same as with gas, there is no excess, it is difficult to contract new volumes at economically acceptable prices,” the expert says.

All this means one thing - the winter for Moldova will be very difficult, even if gas transit through Ukraine continues (and this is now an uncertain moment).
Kondratiev Sergey V. Principal Director on Economic Studies, Head of the Economic Department
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