Russia’s Gazprom threatens to cut Moldova’s gas off in 48 hours over unpaid bill

Russia’s Gazprom threatens to cut Moldova’s gas off in 48 hours over unpaid bill
Russia's Gazprom gave Moldova to pay its overdue gas bill or it would shut the supplies off. / wiki
By Ben Aris in Berlin, Iulian Ernst in Bucharest November 23, 2021

Russia’s national gas company Gazprom warned the Moldovan government on November 22 it would cut off gas supplies unless an overdue payment for gas under the terms of its new contract was settled within 48 hours.

The payment was due on November 22 and has not been made, according to Gazprom.

"The deadline for current payments is November 22,” Gazprom spokesman Sergei Kupryanov told Russian broadcaster NTV, as cited by RFE/RL.

Kupryanov said Gazprom had “notified the Moldovan side that in 48 hours gas supplies to Moldova will be stopped in accordance with the contract.”

“A significant and important” point in the gas supply deal with Moldova was getting “100% current payments for gas on time,” Kupriyanov added.  “The next deadline for current payments was today, November 22. There has been no payment.”

Kupryanov said Gazprom had signed a contract "practically on the terms of the Moldovan side", but stressed that one of the conditions was "that Moldova completes one percent of its payments on time."

He added that Gazprom was "extremely disappointed with Moldova's failure to fulfil its contractual obligations."  

Moldovagaz head Vadim Ceban confirmed that Moldova’s state energy company had received the Gazprom payment demand, saying the sum amounted to MDL1.3bn ($73.5mn).”

“We are actively working with the government to solve the problem by the deadline stipulated in the notification. I hope that we will manage to solve this problem," Ceban told Reuters.  

Moldova declared an emergency in September after its long-term contract with Gazprom expired without a new deal being put in place. Gazprom reduced deliveries to the small republic by more than half, causing an energy crisis, but extended the contract temporarily for a month while talks on a new contract continued.

A new five-year contract was signed and went into effect on November 1 under the terms of which Moldova was set to pay about $450 per 1,000 cubic metres of gas delivered in November – roughly half the current spot market price for the fuel in Europe, according to the nation’s Deputy Prime Minister Andrey Spinu, who participated in the talks, reports Bloomberg. The parties also agreed that an audit of Moldova’s outstanding debt for gas supplies will be done next year.

The price of Moldova’s gas is due to reduce going forwards depending on the prices for gas on the European spot market.

"The price will decline going forward depending on the gas price on the exchanges. In current conditions we will pay half the market price and less than what we paid in October," Spinu wrote on his Facebook page at the time the new deal was signed. He said Gazprom had accepted a price formula proposed by the Moldovan side.

One unresolved issue is the outstanding debt of $709mn for previous gas deliveries that Moldova has built up with Gazprom under the old deal. A repayment schedule is due to be worked out in the New Year.  

Tensions were raised further recently when the Moldovan authorities started taking steps aimed at identifying possible frauds at Moldovagaz. Such frauds have been frequently spotted by investigative media. 

In related news, the government in Chisinau recently replaced its representative on the board of Moldovagaz, saying that the company’s activity must be monitored more closely.

Then, a couple of days before Gazprom’s 48-hour deadline, Speaker of the Moldovan parliament Igor Grosu announced that an audit would be carried out on the accounts of Moldovagaz and on the way the company spends money. A law is being drafted and will be enacted by the end of the year to give the Court of Accounts full rights in this regard, Grosu stated. The move had been announced in advance by President Maia Sandu.

The Moldovan authorities also announced an investigation aimed at establishing why Moldovagaz had not acted in advance to prevent the natural gas supply disruptions in October when the government had to find ways to fill the gap at short notice and therefore at a high price.