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Russia And Moldova Conclude Gas Deal That Liberal Forces Wanted To Avoid

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Russia And Moldova Conclude Gas Deal That Liberal Forces Wanted To Avoid

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Moldova comes to realization that it cannot divorce from Russia.

Written by Paul Antonopoulos, independent geopolitical analyst

Despite being a full member of the Commonwealth of Independent States (CIS), Moldova today is ruled by a liberal government that is attempting to move away from Russia to become closer to the European Union and NATO. This has put Moldova in an awkward situation as its hostility against Russia could have had devastating repercussions as a gas crisis was looming, something that caused angst as winter is only weeks away. 

Although there were difficulties, Moldovan authorities have managed to extend the gas contract with Russia’s Gazprom for the next five years. Moreover, by May 1, 2022, Russia and Moldova will sign a debt settlement agreement for the gas already supplied to Moldovagaz. The announcement was made by Moldova’s Deputy Prime Minister and Minister of Infrastructure and Regional Development Andrei Spînu. He noted that a Moldovan-Russian Intergovernmental Commission meeting to address energy issues would take place this month.

With Moldova adopting anti-Moscow policies and speculation running rife that Russia would not deliver gas to the country, Gazprom actually cannot refuse a long-term contract from a CIS member state unless there is an exceptional situation. Relations between Chisinau and Moscow are rocky, but they are certainly not untenable. Therefore, Gazprom is obliged to conclude an agreement with the CIS member state. It is perhaps only this factor that has saved Moldova from suffering a long and cold winter.

At the same time, unlike Moldova, Ukraine has given up several agreements within the CIS. For now, President Maia Sandu, a former World Bank economist, has not abandoned the CIS and thus avoids the many issues that Ukraine faces due to its refusal to accept the reality that Russia is a neighbor that cannot be ignored – politically, diplomatically and/or economically. Due to Moldova’s begrudging acceptance of this reality, it agreed with Gazprom to extend the gas supply contract for the next five years.

During the negotiations, as previously mentioned by Spînu, the price formation formula proposed by Moldova was approved. The gas supply contract with Gazprom expired on September 30 but was extended for another month until October 31. This month, however, Moldova pays for the delivered gas at a market price of $790 for a thousand cubic meters.

On October 21-22, Moldovan Deputy Prime Ministers Vlad Kulminski and Spînu had the first round of negotiations on the gas contract with Russian Deputy Head of Presidential Administration Dmitry Kozak, General Manager of LLC Gazprom Export Elena Burmistrova and Russian Minister of Energy Nikolai Shulginov. The parties however failed to reach an agreement.

At the same time, Moldova has begun to look for alternative sources of fuel supply to the country. On October 25, Moldova made its first gas purchase from a supplier other than Gazprom. A contract was signed for the trial purchase of one million cubic meters of gas from PGNiG in Poland. During the week, Moldova also purchased gas from the Dutch company Vitol, the Swiss company DXT Commodities and Ukraine’s Naftogaz.

The second round of talks with Gazprom took place on October 27-29 and had the participation of the head of Gazprom, Alexey Miller, Spînu and the Chairman of the Board of Directors of JSC Moldovagaz Vadim Ceban. The parties managed to reach an agreement on the extension of the gas supply contract under the conditions proposed by Moldova. An agreement was also reached on an audit of Moldovagaz’s historical debt to Gazprom.

It is recalled that in the lead up to this gas deal when Moldova was being hostile to Russia, Ceban stressed that there was supposedly nothing complicated in lowering gas consumption for regular consumers, and even recommended for Moldovans to “not boil a full teapot for just one cup of coffee.” This was the initial position of Ceban as his country tried to politicize and delay negotiations with Gazprom for the supply of gas in 2022 in order to present the Russian company as an unreliable partner for Europe.

Although Moldova is attempting to diversify its gas supplies, the country came to the quick realization on the eve of winter that unless it wants to freeze, it cannot maintain a hostile policy against Russia, especially since it would not have the institutional support of the European Union or NATO since it is not a member of either bloc.

Ukraine also attempted to go down a similar path of being hostile to Russia to serve Washington’s interests, but will now lose billions of dollars in transit fees with the advent of Nord Stream 2. Kiev demonstrated beyond doubt that it is an unreliable partner to deliver Russian gas to European markets, and is now the ultimate loser as the European Union is unwilling to offset all of its losses.

Moldova for now has avoided a similar negative outcome.

However, with Sandu in power, it is unlikely that she will abandon her anti-Moscow policies and will renew them once the entirety of the gas situation is solved for the short to medium-term. In this way, although Moldova has avoided the possibility of freezing during the winter, its attempts to pressure Russia will likely continue and be maintained in the hope that it would eventually lead to European Union and/or NATO membership.

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Jon

“Who runs bartertown?”

Putin

Mario8282

“former World Bank economist”… OMG, Moldova to be destroyed beyond repair!

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