November 29 (SeeNews) - Utility company Moldovagaz said it has repaid a 1.33 billion lei ($74 million/ 65 million euro) debt owed to Gazprom for gas deliveries after the Russian energy corporation threatened to cut off its gas supply to Moldova.
Moldovagaz has made the payment to Gazprom for natural gas consumed in October and the first half of November of this year, the company said in a press release on Friday.
The debt repayment became possible after the Moldovan government decided to increase the capital of state-owned company Energocom by 1.7 billion lei through a transfer of funds from the state budget. Energocom will use most of the funds to pay Moldovagaz on behalf of state-owned Termoelectrica power and heat producer that has a historic debt to Moldovagaz accumulated during 2002-2008, the government said in a press release on Friday.
"By assigning the debt of one state-owned company to another, we are partially paying Termoelectrica's debt to Moldovagaz, providing Moldovagaz with the resources it needs to make current payments to Gazprom for October and November, and ensuring further stable gas supply to Moldovan consumers," prime minister Natalia Gavrilita said on Friday.
On November 22, Gazprom notified the Moldovan side that in 48 hours gas supplies will be stopped in accordance with the contract, economic news portal Mold-Street quoted Gazprom spokesman Sergei Kupryanov as telling Russian broadcaster NTV last week.
At the end of October, Gazprom announced that it has extended by five years its contract with Moldovagaz for the supply and transit of natural gas. Moldova's contract with Gazprom expired at the end of September and the government in Chisinau asked for an extension, but did not accept Gazprom's price offer of $790 (700 euro) per 1,000 cubic meters of gas, according to local media reports.
In 2020, Gazprom supplied 3.05 billion cubic meters of gas to Moldova, up by an annual 5.5%, according to the company's own data. Gazprom owns 50% of Moldovagaz, the Moldovan government owns 35.33% and the remaining 13.44% is held by the government of Transnistria, the pro-Russian separatist republic within Moldova.
In October, the European Commission said it is granting Moldova 60 million euro to help it navigate through an energy crisis due to difficulties in striking a new deal with Gazprom. On October 22, Moldova's parliament introduced a 30-day state of emergency starting immediately due to a shortage of natural gas supplies. During the state of emergency, the government is allowed to buy gas under a simplified procedure.
Thus, Moldova bought a total of 3.5 million cubic metres of natural gas from multinational company DXT Commodities, Dutch energy and commodity trading company Vitol and from Poland's PGNiG Group. These were the first ever gas deliveries to Moldova from a non-Russian source.
Moldova has no gas deposits of its own and covers all of its gas needs by importing the fuel from Russia.
(1 euro=19.948 Moldovan lei)