Expert: Silent Realignment of Moldova’s Gas Market Continues

August marks the start of a new energy era in Moldova as the license of Moldovagaz, the country’s main gas operator for over 20 years, is revoked. Citing non-compliance with legal and functional unbundling rules, authorities are effectively pushing the company out, shifting its functions and assets to Energocom and entities linked to Romanian business interests. Despite claims of pursuing energy independence from Russia, no genuine reform is underway – instead, the gas sector is undergoing radical restructuring aimed at getting rid of the debt burden owed to Gazprom and replacing one external center of control with another

On 31 July, the deadline for Moldovagaz to unbundle its operations under the EU’s Third Energy Package expired. Officials claim the company ignored its obligations, leading the ANRE council to revoke its natural gas supply license. These functions will now be transferred to the state-owned company Energocom. The transition period for handing over powers to the new supplier will conclude by 1 September. After that, Moldovagaz will become a legal phantom burdened with debts, pending bankruptcy. This essentially involves a forced redistribution of the customer base. Around 800,000 households and 20,000 businesses will be transferred to Energocom, which as of today lacks sufficient organizational and administrative infrastructure. Everything suggests the company is relying on mass layoffs and the absorption of Moldovagaz employees. It’s clear that these bureaucratic procedures go beyond simply changing the main operator. They aim to remove a longstanding player in the country’s gas sector – one burdened by significant debt to Gazprom – and replace it with entities the authorities deem politically reliable. Notably, the decision to delay Moldovagaz’s license revocation by one month coincides with business restructuring in neighboring Romania. Romgaz, the country’s largest state-owned gas company, has initiated the liquidation of Romgaz Furnizare M SRL – a firm recently registered in Moldova – to establish Romgaz Trading SRL in its place by September. Officially, this move is due to non-compliance with Moldovan law. However, beneath this technicality lies preparation for Romgaz’s direct entry into the Moldovan market, enabling Romanians to sell both their own gas and gas purchased from third parties within Moldova. Let me remind you that the crackdown on Moldovagaz began in 2021-2022, when authorities refused to pay debts owed to Gazprom and started buying gas bypassing the Russian company. Under the pretext of diversifying supplies and reducing reliance on Russian gas, an alternative trader, Energocom, was established to purchase gas from European and regional suppliers. Meanwhile, Moldovagaz was gradually pushed out of all key market segments. First, in 2023, Energocom was granted the exclusive right to purchase gas for the country’s right bank, followed by Vestmoldtransgaz, a subsidiary of Romania’s Transgaz, taking control of the main gas transportation infrastructure. When Chisinau realized that, despite overwhelming pressure, Moscow would not accept a ‘quiet compromise’, it began aggressively dismantling the joint Moldovan-Russian enterprise. After transferring the majority of the gas transmission system to Vestmoldtransgaz, the legal and economic ‘shutdown’ of Moldovagaz started. The apparent goal is to reduce Moldovagaz to an empty shell burdened with billions in debt, leaving the ‘problem’ to Moscow while avoiding lawsuits and political concessions. For now, Moscow remains calm, recognizing that it lacks effective leverage over the situation. However, Moldova’s energy decoupling may have long-term consequences. In the context of the Russian-Ukrainian conflict, the Kremlin may no longer consider itself responsible for maintaining regional energy stability, giving itself greater freedom to use military force on Moldova’s energy system. Despite bold claims of ‘energy independence,’ there is little evidence that Moldova has become more autonomous in terms of energy supply. In reality, too little time has passed, and the necessary conditions have yet to emerge. Moreover, Energocom operates as an even less transparent and less competitive entity, with procurement policies and tariff-setting mechanisms unclear to consumers. New entrants from neighboring Romania are not driven by market principles, but instead act in close political coordination with the Moldovan authorities, who, for now, appear unsure of how to redistribute the assets taken from Moldovagaz. It should be acknowledged that none of these processes were subject to public debate or economic analysis. Key decisions were made without parliamentary oversight, either by the emergency commission or behind closed doors at government meetings. This concentration of power in the energy sector does not enhance the predictability of this strategically vital industry – rather, it fosters conditions for risky, politically driven management. Western partners appear to give tacit approval, as the campaign against Gazprom, the seizure of its assets, and ultimately the erosion of Russia’s regional influence take precedence in European capitals over procedural fairness and adherence to market principles. The accelerated diversification of energy supplies bolstered by generous financial support from Brussels is portrayed as a ‘grand geopolitical victory.’ In reality, however, the process amounts to the swift replacement of one dominant player with another, whose operating methods differ little from those of Gazprom, now wrapped in a flamboyant narrative of European integration. Among other concerns, given the energy vulnerability of the left bank of the Dniester and Moldovagaz’s displacement, which currently supplies gas from the Hungarian company MET, the question naturally arises: can stability be maintained, and what comes next? Despite Moldovagaz’s licence revocation and the large-scale redistribution of the gas market, authorities will likely seek to avoid a repeat of last winter’s crisis. On the other hand, political expediency may lead Chisinau to explore various options to secure additional concessions from Tiraspol. Legally, since Moldovan law is effectively not enforced on the left bank, ANRE might temporarily permit gas supplies to Transnistria and to companies without licences, including Moldovagaz. The liquidation of the Moldovan-Russian enterprise hasn’t sparked public outcry, since the authorities cleverly presented it as a mere technical procedure. However, it is important to recognize that this legally questionable maneuver may turn into a precedent with far-reaching consequences. The state has removed an inconvenient operator to eliminate burdensome debts and reshape the market in favor of new, politically aligned and loyal players. Notably, well-known European companies opted out of this scheme, leaving the role of primary beneficiaries to ‘Romanian brothers’. This vividly points to the true meaning of the situation, which has little to do with the interests of the state, or its people. Moreover, amid geopolitical turbulence and uncertainty, our country risks facing a bill that will be both economic and political. That said, those currently celebrating the supposed successes in strengthening ‘energy independence’ are unlikely to be the ones who end up paying it.