Romanian gas exports to Moldova delayed

By bne IntelliNews September 22, 2014

bne -

 

Almost a month after a new pipeline connecting Moldova to the Romanian gas network was launched, gas exports to Moldova have not yet started. Flows through the pipeline, intended to reduce Moldovan dependence on Russia, have been delayed because of problems reaching an agreement with Moldovan gas monopoly Moldovagaz, whose largest shareholder is Russia’s Gazprom. 

The 42km pipeline Iasi-Ungheni pipeline, which will allow Romania to export gas to southern Moldova, opened on August 27 at a ceremony attended by the prime ministers of both Moldova and Romania, and EU Energy Commissioner Guenther Oettinger. 

At the opening ceremony, Romanian President Victor Ponta told journalists that discussions on gas supply contracts were due to be wrapped up within days. However, as of late September, no agreement had been concluded, according to reports in the Moldovan press. 

MoldovaGaz, the monopoly gas supplier within Moldova, is 50% owned by Gazprom, and 35.33% by the Moldovan state. The remaining 13.44% is held by the government of  Transnistria, a pro-Russian separatist republic within Moldova. There are therefore fears that the company could delay signing supply contracts with Romanian exporters. 

Moldovan Prime Minister Iurie Leanca admitted on September 17 that an agreement on gas imports from Romania had not yet been reached. 

"The Iasi-Ungheni pipeline is symbolic and is meant to ensure energy security. You saw that the pipe is functional when the flame was lit in Ungheni,” Leanca told Moldovan television show “Alb si Negru” (Black and White). 

One possible solution, proposed by Moldova’s Deputy Economy Minister Tudor Copaci, is to set up new new gas transmission companies independent of Gazprom, that would then be able to conclude their own contracts with Romanian Transgaz, Romanian daily Cotidianul reported. 

Plugging into the European gas distribution network will give Moldova an alternative to Russian gas imports, which are delivered via Ukraine. In addition to uncertainty because of the Ukrainian conflict, Moldova’s own worsening relationship with Russia has raised fears that gas deliveries could be withheld this winter. This could be disastrous for Moldova, where it is the primary source of power, accounting for almost 65% of total energy consumption. 

The symbolic importance of the pipeline that will plug Moldova into the EU gas network was highlighted at the opening ceremony in August. Oettinger said it was a “historic day", adding that, “we are celebrating that Moldova is directly integrated into the EU gas market”.

Opening the pipeline was politically important within both Romania and Moldova, as the two countries have elections coming up in November. Critical parliamentary elections in Moldova will determine whether the country continues to pursue EU integration or turns back towards Russia, while Prime Minister Victor Ponta is running for president in Romania. 

The existing pipeline does not pose a major threat to Gazprom’s role as the sole exporter of gas to Moldova. It will supply only the population in and around Ungheni, and is not expected to provide more than 10% of Moldovan gas consumption. Moldova’s largest capital Chisinau and second city Balti are not yet connected to the Romanian gas network. 

However, there are plans to extend it to the Moldovan capital Chisinau within two years. When completed, this will supply more than half the country’s total demand, according to a statement from the European Commission, which is expected to contribute €10m towards construction costs. 

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