Moldova secures long-term Gazprom deal

Moldova has signed a new long-term gas supply contract with Gazprom, a decision set to end a gas crisis in the country caused by the Russian company’s move to cut back shipments and demand political concessions in exchange for a new deal. The former Soviet state has been in negotiations with Gazprom for the past month, while also seeking financial assistance from the EU and attempting to buy enough gas from European companies on the spot market to meet its daily needs. Moldova prime minister Natalia Gavrilita had earlier this week called on the EU for further support in its dispute with Gazprom. She said: “These next few weeks are the time for Moldova’s friends to step up . . . [Otherwise] it will be very difficult politically, socially and economically for the country.” The former Soviet state had declared a state of emergency after Kremlin-controlled Gazprom cut gas deliveries by a third and threatened that supplies could be shut off if Moldova did not agree to a more expensive contract. Gazprom added Moldova could get a better deal on gas if it gave up some pro-EU policies, people briefed on talks said this week. Gavrilita told the FT she would “prefer not to be put in that position” of choosing between cheaper gas and closer ties with Brussels. The Moldovan crisis is part of a wider European gas crunch that has led critics of Gazprom, Europe’s largest gas supplier, to suggest it is trying to extract political concessions and punish countries and governments it disagrees with. Russia had earlier said it was discussing a new contract “exclusively on commercial terms”. Gavrilita’s pro-EU party won a landslide victory in parliamentary elections this year and wants to take Moldova out of its Russian orbit. The EU on Wednesday agreed to provide Moldova with a €60m grant, equivalent to 20 days of gas imports. The grant had given the country vital space “to keep negotiating without a ticking clock”, Gavrilita said. But without an acceptable deal, Mol - dova would need to spend about €800m over the next five months on alternative imports to meet winter demand, based on market prices. That would require more support from Brussels, she added. “These are the four, five months when the EU really has to make absolutely clear that it supports Moldova,” Gavrilita said. “The volumes that Moldova needs are very small . . . in the European context. We do hope we can count on continued support.” This week, Moldova bought its first non-Russian gas in four trial open market purchases totalling 5m cubic metres, enough to meet less than two days of demand. The country was looking at supply deals with gas companies in Poland and Romania, and international trading groups that own gas stored in Ukraine. Gavrilita declined to comment when asked if EU companies were offering below-market prices as an alternative to a new Gazprom deal. But she said the country was discussing potential contract structures and repayment schedules that would make overall costs cheaper than spot market prices.