Moldova seeks Russian gas price discount ahead of end-2019 deal expiry

Moscow, July 18 - Neftegaz.RU. Moldovan President Igor Dodon was headed to Moscow Wednesday for talks about a new gas supply and transit deal with Gazprom - including a request for a gas price discount, Platts reported. Like Ukraine, Moldovagaz' gas supply and transit deal with Gazprom expires on December 31, 2019.

"We [...] need to start negotiations with the Russian side to conclude a new gas supply contract and transit after January 1, 2020," Dodon said on his Facebook page. "Experience of previous years shows that a delay in this process could jeopardize the country's energy security, especially during cold periods of the year".

Moldova was taken to the wire at the end of 2016 when its 10-year supply and transit deal with Gazprom expired, with a new 3-year deal only revealed on January 5, 2017. Under the deal, Moldovagaz agreed to extend the Russian oil-indexed gas import contract to the end of 2019 based on the same terms as the previous 10-year deal that ran from 2007 until the end of 2016.

Dodon said he would also seek a gas price discount from Gazprom after the price it pays for Russian gas under its oil-indexed contract rose by some 25% in the 1st quarter on the back of higher oil prices.

It paid some $237.46/1,000 cu m for its Russian gas in Q1. "I will address in dialog with the Russian authorities the reduction of the gas price for Moldova," Dodon said. "This topic will be addressed in my discussions with the Russian authorities and Gazprom management. A possible consensus in these negotiations would allow us to significantly reduce the need to raise domestic gas tariffs".

Last year, Gazprom supplied 2.94 Bcm of Russian gas to Moldova, which is also a key transit country for Russian gas supplies via Ukraine to Romania, Bulgaria, Greece and Turkey.

But with the construction of the 31.5 Bcm/year TurkStream pipeline and its European onshore extension, the route via Ukraine and Moldova could become obsolete.


Author: Stuart Elliott