Moldova says it won't be able to make next payment to Gazprom

Moldova says it won't be able to make next payment to Gazprom
/ bne IntelliNews
By bne IntelliNews August 11, 2022

Moldovagaz will not be able to make the upfront payment for the gas delivered by Gazprom in August at the end of this month, the head of the Moldovan gas transport and distribution company, Vadim Ceban, announced.

Failure to make the up-front payment may result in disruption of gas supplies in the first days of September. But the government seems more relaxed this time, compared to similar developments last winter, meaning that it may prefer to test the reliability of Russian gas supplies during the summer-autumn months than later during the cold winter months. 

At the price of over $1,400 charged by Gazprom in August, Moldova may decide to begin imports from Romania. The price Moldova pays for natural gas has increased after the country signed a new supply deal with Gazprom in late 2021.

Under the contract with the Russian gas company, the Moldovan company makes an up-front payment to Gazprom by the end of the month for the month’s consumption, amounting to half of the previous month’s bill. The rest of the money is paid by the 20th of the following month.

Earlier in August, Gazprom-controlled Moldovagaz asked for financial facilities from both Gazprom and the government of Moldova, after the market regulator ANRE approved new end-user natural gas prices on August 4. It asked Gazprom to accept a rescheduling of the payments and asked the government for some support.

ANRE refused to accept the end-user prices suggested by Moldovagaz and decided on softer price hikes as of August 1.

The new prices do not cover the import price and the transport price and this will result in the unpaid bills rising by MDL3.9bln (nearly €200mn) until the end of this year, “complicating the functioning of the company,” Moldovagaz said.

No answer was provided by Gazprom and the government confirmed that no support will be provided.

Moldova has come close to being left without gas in previous months as Moldovagaz scrambled to make payments to Gazprom on time. 

In January, Gazprom said it would cut off gas supplies to Moldova unless Moldovagaz made the $63.1mn upfront payment due for the month by the end of January 20. That warning came after Gazprom cut its gas supplies to Moldova by one third in October and later gave the country a 48-hour deadline for the monthly payment in November. 

In April, Chisinau also started looking for alternative suppliers as it was unclear whether Gazprom would continue providing gas from May 1, the deadline for the Moldovan authorities to failed to conduct an independent audit of historical debt. However, gas did continue to flow.