Gas debts: real or fictitious?
The history of debt arguments between Russia and Moldova dates back to the 1990s. It was then that the Kremlin provoked an armed confrontation between the constitutional Moldovan government and separatists in the Dniester region. Since then, residents of the region have not been paying for the gas they consume. Moscow pins the debts on Chisinau.
Russia has issued enormous bills for about $10 billion. Moldova cannot pay this amount even theoretically. For example, this is three times the total revenue of the Moldovan budget in 2023.
Most of the gas debt relates to the separatist territories, which are under the full influence of Russia itself. As for Moldova itself, it owes much less – just over $700 million. But it refuses to pay even that.
"The question is how the debt has been accumulated. There were violations by Gazprom itself when it used our money to pay off the debt of the Left Bank [Dniester region]. There were also thefts from Moldovagaz under the previous management. And there are also bondage conditions in the contract with Gazprom. That's how these debts arose," explained Sergiu Tofilat, an energy analyst at Community WatchDog.MD.
What are the findings of the independent audit?
In 2022, the Moldovan government hired two companies to conduct a full audit of the debts claimed by Gazprom. The Norwegian Wikborg Rein Advokatfirma A.S. and the British Forensic Risk Alliance & Co worked for a year. Finally, the government announced the results: the Russians simply made up the debts.
"Moldova is not going to pay imaginary debts, and Moldovan citizens are obviously not obliged to pay for them either," said Prime Minister Dorin Recean.
Moreover, the auditors recommended that the Moldovan government take legal action against Russia, the reason being that Moscow cut gas supplies by half last year without explanation, thus violating the terms of the contract.
"They wanted to deceive us quickly. They left us without gas. Winter was coming. "Quickly sign that you will return $800 million in four years and you will have gas," said Moldovan President Maia Sandu.
Is Moldova ready for a settlement agreement with Russia?
Moldova is still ready to pay part of its debt to Russia – almost $10 million. And this amount will hardly dampen the Kremlin's appetite.
However, Moldovagaz, the company responsible for purchasing gas from Russia, disagreed with the audit findings. It stated that the conclusions of foreign companies have no legal consequences.
The position of Moldovagaz is easy to explain: 50% of the company is owned by Gazprom. Only 35.33% of the shares are owned by the Moldovan government. And another 13.44% is held by the administration of the unrecognised Dniester region.
Does Moldova buy gas from the Kremlin?
The situation has changed dramatically over the past four years. Moldova has upgraded one gas pipeline that used to transport Russian gas to the Balkans, and now it operates in reverse. By the way, if necessary, this pipeline can also supply fuel to Ukraine.
Moldova has also built a new gas pipeline to Romania, which means that Chisinau has completely abandoned gas from Russia.
"Since December 2022, we have been buying gas from other suppliers. And at more interesting prices than from Gazprom. For example, we bought 400m cu.m. (enough for half a winter) at a price of about $420. Under the agreement with Gazprom, the price for August would have been $526, and for September it would have been $568," said Tofilat.
To purchase gas from other suppliers, Moldova has set up another company, Energocom. There is no Russian capital in it.
Energy dependence on puppet Dniester region
While the situation with gas in Moldova looks optimistic, the situation with electricity is the opposite. The main electricity producer is the Moldovan State District Power Plant. It is located on the territory of the Dniester region.
The power plant is also owned by Russia, and Moscow has come up with a simple scheme to finance the separatist regime. This power plant runs on gas. Russia supplies natural gas to Moldova, and the Dniester region consumes a significant portion of it for free, including the power plant there. But Moscow charges Chisinau.
Instead, the constitutional authorities in Moldova are forced to buy electricity from the separatists. Because its own generation covers only 20% of the demand. Manipulation with gas and electricity generation account for half of the budget of the pro-Russian pseudo-republic.
"We are facing a Moldovan theatre of the absurd. By purchasing electricity from the left bank (Dniester region), which is produced from Russian gas, we are supporting this unconstitutional regime. Which is also a threat to Ukraine, given the deployment of a group of Russian troops there," emphasises Oazu Nantoi, a member of the Moldovan parliament.
The Moldovan government is not yet able to buy enough electricity elsewhere and at affordable prices. Before the full-scale invasion, Ukraine was a major supplier. But due to Russian attacks on our energy sector, this is no longer possible.
Moldova is building a high-voltage line from Romania. According to government forecasts, the work should be completed next year. Then Chisinau will be able to finally get rid of its energy dependence on Russia.
