Gazprom offered Moldova a new gas deal in exchange for weakened ties with the EU
Russian state gas company Gazprom has proposed that Moldova adjust its free trade agreement with the EU and delay energy market reforms agreed with Brussels in exchange for cheaper gas for the country.
The former Soviet republic has declared a state of emergency as it attempts to secure enough cargo to survive the winter gas shortage. Kremlin-controlled Gazprom cut Moldova’s supply by a third last month following the end of a long-term contract and demanded more than double the previous conditions to keep the gas going.
During negotiations this month, Gazprom told Moldovan officials it would reduce the price if the country was ready to change its free trade agreement with the EU, people briefed on the talks said.
Gazprom also wanted Moldova to delay implementing EU rules that require gas markets to be liberalized and allow more competition, the people said.
Two people briefed on the talks said the Kremlin sees the gas talks as part of a broader political settlement with Moldova after President Maia Sandu took office last year and her party staunchly pro EU won a landslide victory in the July elections.
Market analysts have suggested that Russia take advantage of Gazprom’s position as Moldova’s sole supplier to pressure the Chisinau government, which has pledged to move out of Moscow’s orbit and to the west. .
It comes amid a larger global gas crisis that has pushed market prices to record highs.
Russian President Vladimir Putin this month dismissed as “complete garbage” suggestions that the Kremlin has used the gas supply as a political weapon against other countries.
The liberalization of the gas market would have a negative impact on Gazprom and Moldovagaz, its subsidiary in Moldova which owns and operates the country’s gas network and buys and sells cargoes.
Moscow would also prefer Moldova to abandon the Deep and Comprehensive Free Trade Area Agreement with the EU and join its rival, the Eurasian Economic Union instead.
Moscow sees Moldova as part of its sphere of influence and sees itself as the protector of the Russian-speaking population in the small breakaway state of Transnistria, where it retains a small military contingent.
Dmitry Kozak, a senior Kremlin official who heads Moscow’s relations with post-Soviet states, held negotiations last week with Moldovan officials who failed to reach a compromise on gas prices.
Putin’s spokesperson Dmitry Peskov said Gazprom’s offer was “carefully calibrated, clear, justified and, from a price point of view, extremely favorable to the Moldovan side,” according to Interfax.
Moldova on Tuesday received its first delivery of gas from a non-Russian source, purchasing a 1 million cubic meter trial from Polish company PGNiG via Ukraine, in an initial tender that bypassed Moldovagaz.
This, in addition to another test shipment from neighboring EU member state Romania, came after weeks of crisis talks with EU officials for Brussels to provide support. additional funding and for Member States to make gas available.
The Moldovan government fears massive unrest this winter, due either to a shortage of gas or inevitably high prices for heating and energy.
“The Russians are hitting the country at its weakest point, at the worst possible time,” said an official involved in the negotiations.
Moldovan Prime Minister Natalia Gavrilita will head a delegation to Brussels for talks on Thursday as part of talks to increase the level of EU grants and loans.
Moldovan officials will meet Gazprom chief executive Alexei Miller in St. Petersburg on Wednesday. EU diplomats urged the country not to sign a new long-term deal with Russian society and instead find short-term solutions to get through the winter.
But industry analysts have questioned whether the additional supplies from EU members would be enough to supplant Russian exports to the country of 2.6 million, while spot market costs are likely to be prohibitive without subsidies. important.
Pawel Majewski, CEO of PGNiG, said the company was “ready to participate in the next tenders” for the gas supply to Moldova.
“Apart from our business activities, by supplying gas to Moldova, we are also showing our energy solidarity,” he said.
Additional reporting by David Sheppard in London