Moldova purchased American gas in test mode through Greece

Moldova will purchase American LNG for the first time in test mode through a terminal in the Greek port of Alexandroupolis. The purchase volume is insignificant – only about 2.6 million cubic meters. Moldova, left without Gazprom gas, has been actively looking for alternative gas suppliers over the past two years, since the Russian Federation continues supplies only to Transnistria. At the same time, the cost of such purchases, according to analysts, remains higher than supplies from the Russian Federation.

Moldovan Energocom will supply its consumers with test volumes of American-origin LNG for the first time, according to the company’s announcement. The LNG will be supplied from a floating terminal in Alexandroupolis with the help of the Greek DEPA Commercial.

“On Monday and Tuesday we will purchase 14 thousand MWh of natural gas from the port of Alexandroupolis every day. In total, about 28 thousand MWh, which is equivalent to 2.6 million cubic meters of gas,” said Acting Director of Energocom Viktor Bynzar. The company has already purchased pipeline gas from Greece in 2023.

Moldova does not currently buy gas from the Russian Federation, but Gazprom supplies still go to Transnistria, including for the Moldavian State District Power Plant Inter RAO, which supplies electricity to the right bank of the Dniester. Russian gas enters Transnistria in transit through Ukraine.

The company does not disclose the cost of LNG supplies from Greece. As the head of Moldovagaz, Vadim Cheban, announced on April 1, the cost of pipeline gas supplies from Gazprom to Transnistria in April will decrease by $12, to $327 per 1 thousand cubic meters.

The price of gas on the EU spot market in March averaged $300 per 1 thousand cubic meters. Spot LNG shipments cost about the same, but Moldova will also have to pay for pumping gas through Greece, Bulgaria and Romania.

In October 2021, Gazprom and Moldovagaz entered into a five-year contract for the supply of 3.3 billion cubic meters of gas per year – these volumes were to be distributed between the right and left banks of the Dniester. But in November 2022, Gazprom halved gas supplies to Moldova through Ukraine, arguing that the Ukrainian side was blocking one of the two entry points to the export gas pipeline. Currently, only 4 million cubic meters of gas per day transit through Ukraine from the Russian Federation against the contracted 9 million cubic meters per day – all of it goes exclusively to Transnistria, while Moldova itself buys gas from European countries.

Moldavian Energy Minister Viktor Parlikov stated on February 1 that Moldova could resume gas purchases from Gazprom for the right bank of the Dniester if the price is favorable.

“In 2023, Moldova did not purchase Russian gas for the right bank, because there was no point, since it was more profitable on the exchange. Over the past year, we saved about €60 million due to the fact that we purchased gas on the market and not from a Russian supplier,” he said. According to him, “if the price is better, then we can purchase from Gazprom.” He emphasized that “there is no political decision prohibiting purchases from Gazprom, no sanctions have been imposed.”

However, the parties have unresolved disagreements regarding the payment of Moldova’s historical debt to Gazprom in the amount of $709 million, which it considered unfounded. Kyiv says that the transit of Russian gas through the country will end at the end of 2024, which will potentially cut off both Moldova and Transnistria from supplies.

As Sergei Kondratiev from the Institute of Energy and Finance notes, the United States, along with Russia, is one of the key suppliers of LNG to Greece with a share of 35% over the past year. In January, imports to Greece were carried out on the basis of $670 per 1 thousand cubic meters, although now prices, given the dynamics on the spot market in the EU in recent months, have decreased. Taking into account regasification and transportation, the cost of gas for Moldova could be $485–490 thousand cubic meters. “This is significantly higher than Gazprom’s prices, but given the small volume of purchases, it is unlikely to affect both the diversification and the budget of Moldovagaz,” the analyst notes.

Tatiana Dyatel