Expert: Moldova Readies to Cut Energy Ties with Russia

Sergiu CEBAN

The president and PAS’ latest internal political and diplomatic maneuvers show that they consider the risk of being left without Russian energy resources extremely high 

The situation in the international and especially European energy sector continues to develop extremely negatively. The prices keep growing steadily, which, according to experts, bodes no good in the next six months/year. The natural gas price on trading exchanges has reached new highs, nearing $2,500 per thousand cubic meters after Russia’s Gazprom announced the shutdown of another NS-1 turbine. In general, the EU has so far tried to show solidarity and not to give in to what is seen as blatant blackmail by the Kremlin. But still, some statements from various European capitals testify to the growing tension in the European politics, especially in Germany. It is no coincidence that the recent visit of former German Chancellor Gerhard Schröder to Moscow, who has allegedly decided to spend his vacation there, has come to the spotlight of journalists. While, according to sources, the former German politician did go there to hold closed-door talks with Russian officials. Apparently, the Moldovan authorities also see the need to prepare for “tough times”. The parliament, which has decided that now is the time to go on summer vacation, has prudently extended the state of emergency for another 60 days. This implies that the government will keep exercising its exclusive powers, which, in theory, should help administer the Ukrainian refugee crisis more efficiently and ensure the state’s energy and food security. Moreover, the deputies made sure that we do not freeze in the coming winter and last Friday voted in the second reading of amendments to the law on natural gas, and a number of other acts related to the gas supply. One of the main innovations is the natural gas suppliers’ obligation to stockpile natural gas in a neighboring country in an amount sufficient to cover the country's needs for two winter months. It was planned to use the loans allocated by EBRD for the same purpose, but the sharp rise in gas prices eventually allows to buy gas for 10-15 days of winter at best. In the current climate it is extremely unsafe to buy and store it in Ukraine, so it is necessary to reach an agreement with the Romanian neighbors. Apparently, for this purpose, first of all, Maia Sandu went to Bucharest, where, among other things, our Cabinet’s desire to buy gas from Romania was voiced. Sandu and her Romanian colleague Klaus Johannis agreed that Bucharest and Chisinau need to calculate all possible options for the development of the situation and prepare plans with an appropriate set of measures for them. This raises an interesting question: what, in fact, are our authorities preparing for, and what scenarios does Bucharest point to? Given that we don’t see the slightest hint of attempts to settle the energy problems with Moscow, most likely, they are preparing us for the worst case scenario – breaking the contract with Gazprom. As economists estimate based on the current international market situation, the government will need about two billion dollars to ensure more or less smooth winter period. In addition, more than half a billion dollars must be found to cover the price difference and compensate the population to pay for high tariffs which will certainly increase several times if energy resources are purchased at market value. Even if we imagine attempts to reach an agreement with Moscow in theory, such negotiations would obviously involve politics and the Kremlin’s terms would be politically disastrous for Moldova’s current pro-European government. Actually, Russia does not even hide its political motives and, through the mouth of the Kremlin administration’s spokesman, expresses its so far relatively mild indignation over the “struggle” against the pro-Russian opposition, as well as the “systematic promotion of an anti-Russian agenda” and refusal to cooperate. Meanwhile, Andrei Spinu, the chief gas negotiator, said that reduced supplies of Russian gas to Europe makes Gazprom a less and less reliable supplier and causes great energy uncertainty on the European continent. In addition, the deputy prime minister openly admitted that the contract with Russia could be terminated because of a failure to comply with one of the contract provisions, which, in turn, creates risks in the purchase of electricity from the main supplier, the Moldovan GRES, which depends on Russian gas. For this reason, our authorities may start buying electricity entirely from Ukraine. In fact, we already buy 30% of our electricity from Ukrainian suppliers. But due to the instability in the neighboring country, there is an obvious risk of being completely reliant on exports from Ukraine, especially since there are no technical possibilities for alternative supplies from Romania yet. The president’s trip to Bucharest is a clear sign that our country is entering a period of utmost unpredictability. The degree of tension in relations between the European Union and Russia is becoming so threatening that it’s no longer possible to interpret Gazprom’s actions from a purely economic logic. That is why it is safe to assume that gas supplies to Moldova can be terminated at any moment. The Kremlin may well shut off the gas valve but only in the most suitable conditions and in order to deliver a crushing blow to the current pro-Western government in Moldova. As internal political developments show, Moscow continues to stimulate the growth of anti-government sentiment and shapes Gagauzia into a kind of “center of resistance” to the current government which will then move further to Chisinau after there is enough protest potential. Therefore, PAS and Maia Sandu are actively exploring backup options so as to neutralize the Russian energy factor and keep Moscow from achieving political revenge in Moldova.