Russia’s Gas Ultimatum

Sergiu CEBAN

The discovered scheme with “withholding” a part of Russian gas intended for Moldovan consumers in Ukraine can lead to an even greater reduction of gas supplies from Russia to Moldova – or even to their complete cessation  

This Monday, another meeting of the Platform to Support Moldova was held in Paris, and its results, compared to the previous two – in Berlin and Bucharest – look much thinner. This even caused a little indignation of the Romanian Foreign Minister, who emotionally said that in the current critical situation, Chisinau needs not loans, but non-repayable funds in the form of grants. Apparently, the situation in the economy and our energy prospects are really bad, and the amount of aid does not allow us to cover the so-called winter needs. The issue of gas supplies has long been entrenched as a major intrigue, and everyone was looking forward to the next settlement date of Moldovagaz to Gazprom. But this time our authorities, for some unknown reason, decided to pass the calendar cycle as quietly as possible, this time doing without new “creative” ideas. Somebody, on the contrary, found this muted gas issue disturbing – and, apparently, for a good reason. It is hardly a trivial coincidence that after another payment to Gazprom, our Court of Accounts announced its verdict on the audit of the historic debt, which revealed about $600 million of debt. Thus, the first step to its official recognition was made. However, in parallel with the Chamber of Accounts, Moldovagaz is still being audited by a Norwegian company and a British one, whose conclusions will form the basis of the draft agreement on debt repayment. Having made a gesture towards Moscow in the hope of softening Gazprom’s position, Andrei Spinu’s office, and along with it Prime Minister Natalia Gavrilita, with confidence worthy of a better use, began to convince everyone that the Russian monopoly has reserved the annual daily capacity until September 2023. Allegedly, therefore the volume of 5.7 million cubic meters per day is guaranteed to be pumped for our needs. The Prime Minister assured that even if Russia did not order additional capacities, at least there were no signals about stopping deliveries. Apparently the Russian capital did not get any “constructive gestures” from our government and yesterday a short statement of Gazprom appeared out of the blue. The Russian company allegedly records the accumulation of part of its gas intended for Moldovan consumers in Ukraine by comparing data on the supplied volumes at the Russian-Ukrainian border with the transmitted volumes at the border between Ukraine and Moldova. This was followed by a threat that if the transit imbalance persisted, gas supply for transit would be reduced starting from November 28 in the amount of daily undersupply. In fact, they began to reduce the supply today. The first to react to this statement were, of course, stock exchange traders, who understand that any disruptions to gas exports threaten the energy security not only of Moldova or Ukraine, but also of end consumers in Europe. Therefore, after a warning from Gazprom, the quotes grew sharply, exceeding USD 1,400 per thousand cubic meters. We have to admit that the fears on the European markets are not groundless, since such a suspicious transit imbalance has probably occurred for the first time since the start of the Russian-Ukrainian conflict. At first glance, it appears that Ukraine is not fulfilling its contractual obligations and is not pumping the volumes of gas it receives for transit. Although earlier, when Gazprom reduced gas supplies to our country from October 1, explaining it by technical difficulties on the Ukrainian side, Kyiv confidently claimed that it has the necessary facilities and is ready to supply any amount of gas Moldova needs. Seeing the attempts to blame Ukraine, Naftogaz did not keep silent for a long time and responded to Moscow’s accusations, explaining that it received all the volumes intended for Moldova in a backhaul regime. Furthermore, Kyiv believes that by threatening to reduce the volume of gas supplied, Gazprom is trying to deprive our country of the possibility to use the Ukrainian GTS and underground gas storage facilities, as well as to block the use of the backhaul mechanism. Indeed, if Chisinau were to fall short on its contracted volumes, we would surely all hear about it. But for now, Deputy Prime Minister Andrei Spinu is proud of himself and the country, periodically reporting on the replenishment of gas reserves for the worst-case scenarios. The only one who continues to relentlessly alarm about the blue fuel shortage is Tiraspol, which continues to knock not only at Moscow’s doors, but also tries to seek justice at the UN and OSCE. After a series of statements by Moscow, Kyiv and Tiraspol, it is Chisinau that seems to be in the most awkward position. Our leaders have been gathering their thoughts for twenty-four hours to finally give us their vision of what is happening. Spinu openly acknowledged that the strategic reserve was formed namely from the contracted volumes from Gazprom, and nominally all the Russian gas goes to Moldova. But, apparently, only on papers, because part of the blue fuel is directly pumped into the Ukrainian storage. So why was it necessary to hide it and escalate the situation to Gazprom’s threats? Or what Spinu’s office did was not quite legal from the point of view of the agreement with the Russian side? A little later, Vadim Ceban, Head of Moldovagaz, also spoke and presented a slightly different version: while confirming that Ukraine had always transmitted the requested volume to Moldova, he called the accumulation of some gas in the neighboring country a consequence of its non-demand by us because of abnormally favorable climatic conditions at the beginning of the month. Of course, we do not know the whole story, and it is quite possible that Moscow broadcasted some warnings through Moldovagaz channels, to which, one must assume, they did not pay much heed. And so yesterday Moscow essentially gave our government an ultimatum, setting a deadline until next Monday. The literal content of the demand remains unknown, but most likely it’s about the need to stop speculating on Russian gas. It turns out that either we reverse the situation and take the entire volume of gas, or the supplies will be locked up to the current consumption level. Backhaul is a long-known scheme, through which many famous Ukrainian politicians and oligarchs profited. It is hard to believe that Spinu could have arranged such dubious adventures without the approval of the country’s top leadership. It is not quite clear whether someone in Chisinau took into account how risky such a gas swindle was. But the consequences of such a scheme, in fact, have already led to the loss of cheap electricity exports from the left bank and created grounds for an even greater reduction in gas exports from Russia – or even a complete cessation of its supplies. In light of the recent emergency power outage throughout Moldova after another series of Russian missile strikes on Ukraine, such “gas games” seem to be twice as dangerous.