“The mentioned examples emphasize how important was the Constitutional Court’s decision to declare unconstitutional the agreement to borrow €200 million from Russia, which contained references to debts of business entities.”
Waiting for Ungheni-Chisinau gas pipeline
Minister of Economy and Infrastructure Sergiu Railean informed us that: “Until August 1, 2020 we will be ready to put the Ungheni-Chisinau gas pipeline into operation. At this stage, 1.5 million m3 of gas a day could be supplied through the gas pipeline, while by December 1, we could ensure the transportation of 2-3 million m3 of gas a day. After the compressor and gas pressure regulation station is built in Gherăești, by January 1, 2021 we could transport 4 million m3 of gas a day to the Republic of Moldova”. This is a reason for joy for the citizens after we have waited for the diversification of the imported energy agents for so many years, especially of natural gases. We know, for example, that the works to build the aforementioned gas pipeline were to start in 2016, but started only in 2019.
Elementary calculations show that during the five months that remained till this yearend, we could import over 200 million m3 of gas through the Ungheni-Chisinau gas pipeline, while from January 1, 2021, we could important over 1.4 billion m3 annually. Given that the Republic of Moldova during the past few years consumed approximately 1 billion m3 of gas a year, through the Ungheni-Chisinau gas pipeline alone we could import by 40% more gas than the country’s economy and the citizens consume. We will yet see how the regulations work and how the competition between the gas suppliers of Romania and Russia’s Gazprom develops. One thing is for sure - things go in the right direction.
We are actually used to the fact that good news is served before the elections, when the politicians usually make optimistic statements. Indeed, during the past few years, the good news about the energy sector has been great in number. Two years ago, before the campaign prior to the parliamentary elections, the then Speaker of Parliament Andrian Candu said that together with the beginning of the construction works on the Ungheni-Chisinau gas pipeline, there is prepared the electric interconnection with the EU, including with Romania. They spoke about loans and grants totaling €250 million for ensuring the interconnection that in two years, in 2022, should be at the first phase of implementation.
On the Eastern energy front…
Judging by the aforementioned, it seems that we come closer to energy independence slowly, but steadily. However, there is relevant information that makes us gloomy. On July 26, 2020, ex-MP Alexandr Petkov, minority shareholder of the joint stock company (SA) “Moldovagaz”, published an article about the company’s general assembly in which he took part. According to the ex-MP, the items on the agenda included the approval of transactions for the supply of natural gas to the Republic of Moldova based on contract №1 ГМ-07-1, which was signed on December 29, 2006 and is valid until December 31, 2020. Under the document, the Russian giant Gazprom in 2020 supplies 3.16 billion m3 of natural gas, with Moldovagaz pledging to receive the merchandise and to pay its price in accordance with the contract clauses. The document also provides that Moldovagaz will ensure the transportation through Moldova of 0.78 million m3 of gas.
Ex-MP Petkov considers Moldova’s legislation was violated when adopting the given decisions and serious damage was caused to the state and the citizens. His argumentation starts from the ownership structure of SA Moldovagaz, in which: 50% of the shares are owned by Gazprom; 35.33% – by the Government of the Republic of Moldova, represented by the Public Property Agency; 13.44% – by Transnistria through Tiraspoltransgaz, represented by the Property Management Committee, and 1.23% – by private shareholders. In such circumstances, a series of data from the documents that were approved at the general assembly, but were actually adopted on December 31, 2019 are emphasized:
- Transnistria’s total debt for the consumed natural gas amounts to approximately $6.82 billion, the debt formality belonging to SA Moldovagaz, which signs contracts with Gazprom;
- Transnistria, in 2005, announced its withdrawal from the joint stock company, transferring its shareholding to Gazprom for fiduciary administration;
- Transnistria, according to the report for 2019 presented by SA Moldovagaz, refused to pay the price of the gas supplied to the region - 1.8 billion m3, transferring only $14.3 million (by $7.8 per 1,000 m3) to the supplier, instead of paying the total sum of $412 million;
- The Government of the Republic of Moldova approved the price of $173.4 per 1,000 m3 for the natural gas supplied in 2020, Transnistria not being able to pay this price, as last year and the previous years. This way, the Transnistrian region’s consumption will become the burden of the consumers form the right bank of the Nistru;
- The price set for the supplies of Gazprom to Moldovagaz is several times higher than the price of supplies on the European market and by 70% higher than the Moldovan authorities promised.
To clarify things, representatives of Moldovagaz provided explanations, saying that: “because Tiraspoltransgaz does not pay for the consumed gas, Moldovagaz went to court to recover the debts. Currently, Moldovagaz has six court judgments that took effect and is to collect debts for gas totaling $5.5 billion from Tiraspoltransgaz in favor of Moldovagaz through bailiffs. So, Transnistria consumes gas, Gazprom manages its shareholding, while the debt is transferred to Moldovagaz, which must pay for Transnistria’s consumption to Gazprom. It should be also made clear which judges adopted the decision and which bailiffs will put them into practice.
Conclusions
The aforementioned shows and it is evident that the Republic of Moldova should make every effort to swiftly solve the problem of import of natural gas from Romania. The same is true about the interconnection with electricity networks.
When the contract with Gazprom expires, the signing of a new contract with this company should include clear, unambiguous references to the method of paying the debts for the gas consumed by Transnistria.
The mentioned examples emphasize how important was the Constitutional Court’s decision to declare unconstitutional the agreement to borrow €200 million from Russia, which contained references to debts of business entities.
Victor Pelin for IPN