Thread by @DionisCenusa

#Moldova_Russia: The protocol of the extended contract with Gazprom was published today. Additionally, Moldovan Minister of Infrastructure Spânu revealed some details about the gas contract. Here is my take on the main details of the contract and the protocol (THREAD/17): ⤵️

1) Although the contract was extended for 5 years, the volumes actually reserved are only for one year (November 2021-October 2022). 2) Only the contract includes the exact price formula. Moldova's energy regulator (ANRE) will receive and approve the contract these days. ⤵️

3) Due to the commercial secret clause, it will not be made public. Nonetheless, the price formula has been released to the public by Russian sources (price formed on the basis of calculations of 70% to 30% of oil & gas spot market prices depending on the warm & cold quarters).⤵️

4) Technically, the contract can be canceled (statement by Minister Spânu), if the Moldovan government and Gazprom do not find a common denominator in the gas debts on the Moldovan side (constitutional territories, not the Transnistrian region). ⤵️

5) The final numbers of debt will be established based on an independent auditing that will take place before May 2022.⤵️

6) The assessed and confirmed debt will be approved at the level of the gas companies MoldovaGaz and Gazprom in a separate document. Regardless of the figures, the debts issue should be settled by 2027.⤵️

7) Moreover, the government of Moldova agreed not to reorganize MoldovaGaz (50% of the shares belong to Gazprom) or sanction it until the debts are paid.⤵️

8) By the end of 2022, the gvts. of the two countries agreed to sign a bilateral energy cooperation document that will also provide a solution to the historical gas debts. ⤵️

9) Gazprom and the government of Moldova accepted to convene the intergovernmental economic commission in November. Within it, the two parties aim to sign a cooperation agreement in the energy sector. ⤵️

10) In fact, despite previous subtle accusations from the Moldovan side about political pressure from Russia, now the Moldovan government wants cooperation with Russia in the field of energy. ⤵️

11) The government of Moldova also purposefully insisted on mentioning that it maintains the commitment to the full implementation of the Third Energy Package.⤵️

12) However, it admitted a maximum delay of up to one year for the implementation of the Package. This mainly refers to the application of "unbundling" in the gas sector, where Gazprom still has the monopoly. ⤵️

13) The government of Moldova stated that it can import through the interconnection with Romania. During the gas shortage in October, Transgaz in Romania supplied approximately 1 million m3 of lended gas to stabilize the pressure in the gas system.⤵️

In reality, the delivery of commercial volumes is not yet possible until the “unbundling” in the gas sector is completed. ⤵️

14) Overall, Moldova imported gas volumes worth around $ 17 million. Most of this amount was spent to buy gas from Naftogaz (based on gas spot prices in Europe) during an offer launched on October 28, when the Moldovan government announced that it closed the deal with Russia.⤵️

15) The end result of the contract extension secured by the Moldovan government is not bad, but not perfect either: there is a long-term contract obtained at a critical moment; and, the price will be half that of the European gas spot market.⤵️

16) The main downside of the new gas is that Moldova has admitted that it will pay the debts and will not sanction MoldovaGaz. ⤵️

17) In addition, the contract allows the accumulation of more debts for the consumption of gas by separatist regime in the Transnistria region (in addition to the existing amount of around $ 7 billion).