3 Oct 2022 13:16

Gazprom reduces daily gas supplies to Moldova by almost one-third - Moldovan deputy PM

CHISINAU. Oct 3 (Interfax) - Gazprom has reduced the daily amount of gas supplies to Moldova by 30%, Moldovan Deputy Prime Minister and Infrastructure and Regional Development Minister Andrei Spinu said.

He told a press conference on Saturday morning that Gazprom had only confirmed the gas supply volumes for October after 8:00 p.m. on Friday, September 30.

"Gazprom has confirmed gas supplies in October, reducing the volume by 30%. Of the 8.06 million cubic meters a day, including the Transdniestrian region, 5.7 million a day has been confirmed. The situation that happened last October, when the supplies were also reduced by 30%, is occurring again. But the difference is that this year we have a signed contract, which needs to be observed," Spinu said.

Moldovagaz will ask Gazprom to supply additional gas volumes in this situation, he said. "Moldovagaz has already sent a request for additional gas volumes for every day in the October 1-7 period. Gazprom has not responded yet. We are hoping we can receive additional volumes to meet consumers' needs in full," he said.

If Gazprom does not fulfil the request for additional supplies to the needed volume, Moldovagaz will try to buy gas from alternative sources, he said.

"We also have gas reserves that were purchased for such cases. The company Energocom has 53.5 million cubic meters of gas in its reserve. At the same time, we proceeded from last year's volumes. We have already started saving gas, and we encourage the people to maximally save all types of energy resources," Spinu said.

Responding to journalists' questions about the possibilities of buying gas from other sources, including shale gas, the deputy prime minister said that "the whole problem is the price."

"Possibilities to buy gas from alternative sources exist. But the problem is the price. The best price is now the price envisaged by the contract between Moldovagaz and Gazprom," Spinu said.

Responding to journalists' questions about the reasons for the reduction of gas supply volumes, he said Gazprom said there are technical reasons for that.

"Gazprom cited technical problems. We believe that there are no such problems. Especially in the situation when there is a signed contract and volumes agreed upon in advance. Unfortunately, despite the current contract, such uncertainty remains in the relations with Gazprom," Spinu said.

Commenting on the provisions of the contract with Gazprom at journalists' request, he said the contract has provisions concerning an obligation to supply gas in the stated volumes.

"Liability for violations of these provisions is also envisaged. Moldovagaz lawyers are studying this issue. But we hope for good cooperation, that it won't come to litigation on his matter, and that the parties will fulfil their obligations," Spinu said.

He also said the gas price for Moldova, under the contract with Gazprom, will be $1,028 per cubic meters in October, which is 40% less than in September.

Spinu said it became possible thanks to the contract with Gazprom, under which the price calculation formula changes from October 1. The deputy prime minister said the tariff for end consumers remains unchanged.

"We had a very high buying price in August and September. If the tariffs had been brought into compliance, the price for consumers would be at a level of 40 lei per cubic meter ($2.1). The price was 23 lei ($1.18), and I will be 29 lei per cubic meter ($1.5) from October 1," Spinu said.

On September 29, the Moldovan government's Moldovan Commission for Emergency Situations decided to procure another 15 million cubic meters of gas to replenish the reserves. Moldovagaz used the money provided by the commission to fulfil its financial obligations to Gazprom for September on September 30, which helped prevent termination of gas supplies to the country.

Moldovagaz and Gazprom signed a five-year contract for the supply of gas that went into effect on November 1, 2021. According to the formula envisaged by the agreement, the price is formed based on 30% of the gas price on the spot market in the period from October to March 31. In the period from March 1 to September 30, on the contrary, 70% of the price depends on the gas price on the spot market and 30% depends on the oil price. Moldova's price for gas from Gazprom was $450 per thousand cubic meters in November 2021, $550 in December, $647 in January 2022, $564 in February, $547 in March, $1,193 in April, $920 in May, $880 in June, $980 in July, $1,458.5 in August, and $1,883 per 1,000 cubic meters in September.

After the new contract was signed, the tariffs for consumers were brought into compliance with its conditions, going up 2.4 times. The tariffs were increased again by 40% on January 1 and by another 30% on June 1, 2022, and they will be increased again by 27% from October 1. Thus, the tariffs for consumers increased almost six times over one year.