Moldova Signs New Contract with Gazprom
Moldova has faced a gas crisis following the expiration of its contract with Gazprom (Creative Commons).
Moldova signed a new five-year contract with gas company Gazprom on October 30 following negotiations over price formulas and audits. Prior to the agreement, Gazprom threatened to cut off gas supplies by December 1 if Moldova resolved issues of money owed for previous shipments and did not sign a new contract.
The new Gazprom deal will provide Moldova with gas at lower prices than most other European countries, as well the opportunity to audit Moldova’s existing debts for previous gas shipments. It also gives Moldovan officials the opportunity to review gas prices every quarter.
The company cut a third of Moldova’s gas supply over the disagreements about payment for previous supplies, for which Moldova owes Gazprom $709 million. The supply cut led to an energy crisis in Moldova, where the government has declared a state of emergency. As supplies dwindled in the weeks before negotiations, the Moldovan government turned to other states for gas purchases on the spot market, receiving shipments from Poland, Ukraine, and Romania.
Gazprom, a state-owned Russian company, is Europe’s largest supplier of natural gas. As such, it has immense influence on European politics. Many analysts assert that Gazprom is bullying countries into accepting deals on gas exports and pipeline infrastructure by reducing supply. The same dynamic is present in this most recent Moldovan deal, where Gazprom has promised more favorable terms on the condition that Moldova weakens its relationship with the EU.
Moldova, a former Soviet republic and one of Europe’s poorest countries, relies on Gazprom for its gas supply. Gazprom’s threats and reductions of exports to Moldova reflect prevailing Russian influence in the state, even as Moldova attempts to remove itself from the Russian sphere and move closer to Europe.
The European Union has offered some assistance to Moldova in the form of a €60 million grant, as well as advice on seeking alternative sources of fuel from within Europe. The EU has accused Russia of weaponizing its gas supply to influence Moldovan political positions, with top EU diplomat Josep Borrell tying gas price increases to Russian political maneuvering.
This energy crisis is a challenge for the new pro-Western government led by Moldovan Prime Minister Gavrilita, who has attempted to distance the country from the Russian sphere of influence. The country’s purchase of fuel from its European neighbors represents the willingness of the government to turn to Europe in the face of mounting pressure from Gazprom negotiators and from residents dealing with the consequences of gas shortages.
The situation is further complicated by ongoing tensions in the Transnistria region, where Russia has deployed 1,400 troops. Moldova disputes the independence of this region, which broke away in 1990.