We settled, and that’s enough – Newspaper Kommersant No. 217 (7418) dated 11/23/2022

Gazprom is ready next week to reduce gas supplies to Moldova due to the fact that the country, itself experiencing a shortage of fuel, has been selling part of the gas supplied under a contract with Gazprom to Ukraine since the end of September. Although the Ukrainian side claims that we are talking about legitimate virtual reverse operations, Gazprom called this a “settlement” of transit gas and intends to stop this practice. The conflict may affect the gas supply to Transnistria: according to analysts, in the event of a reduction in supplies to Moldova, the left bank of the Dniester will suffer in the first place.

“Gazprom” recorded the “settlement” of Russian gas, intended for supplies to Moldova, on the territory of Ukraine, the Russian monopoly reported on November 22. While maintaining the “transit imbalance”, the company intends to reduce the supply of gas for transit to Moldova by the volume that does not reach Moldovan consumers from 10 am on November 28.

Gazprom said that on November 21, Moldovagaz paid for part of the supplies for November and the volume of Russian gas actually supplied, “in respect of which payment for current supplies in November was violated, is 24.945 million cubic meters.”

In general, according to Gazprom, Ukraine has accumulated 52.52 million cubic meters of gas intended for Moldova: the imbalance began to accumulate in September.

Now Gazprom sends almost 43 million cubic meters of gas per day to Europe through Ukraine.

The operator of the Ukrainian gas transmission system (OGTSU) on the same day said that Gazprom’s claims are related to the start of gas supplies from Moldova to Ukraine under the virtual reverse (backhaul) scheme. Under this scheme, the recipient of gas can sell it even before the moment when the gas physically crosses the border, while legally the gas is considered delivered. In this case, Moldova could sell its Russian gas to Ukraine, and as a result, these volumes did not physically cross the border with Moldova and remained in Ukraine. Ukraine became able to use virtual reverse after signing a new transit contract with Gazprom at the end of 2019, and has since used this method almost exclusively to buy gas from Poland, Slovakia and Hungary.

“By threatening to reduce the volume of transportation to Moldova, Gazprom is trying to deprive this country of the opportunity to use the Ukrainian GTS with UGS facilities and block the virtual reverse tool, thereby increasing dependence on Russian gas at the beginning of the heating season,” the OGTSU believes.

Moldovagaz has not yet provided an official comment.

Since October, Gazprom has reduced gas supplies to Moldova by 30%, to 5.7 million cubic meters per day, citing the refusal of Naftogaz Ukrainy to provide gas transportation services through the Sohranivka point. In response, Chisinau reduced gas supplies to the uncontrolled Transnistrian region (left bank of the Dniester) by 40% – to 2.3 million cubic meters per day, on the territory of which the large Moldavskaya GRES is located. As a result, the State District Power Plant reduced the supply of electricity to the right bank of the Dniester, and since November 1, Chisinau has been purchasing the missing volumes of electricity from Romania. At the same time, both Moldova and Transnistria suffer from shortages of gas and, in recent weeks, electricity.

Although the virtual reverse scheme is obviously common and legal, Gazprom’s actions seem to be designed to draw attention to the fact that Moldova, during the energy crisis in the country, sells a significant part of the gas it receives to Ukraine.

Based on the figures presented by Gazprom, from the end of September the republic could sell about 18% of the gas it received to Ukraine. For Moldova, the attractiveness of such an operation could be explained by the fact that the price of gas under the contract with Gazprom has dropped significantly since October, while Ukraine is likely to buy it at a higher price, linked to European gas market quotations. Perhaps the Russian company believes that preventing gas exports from Moldova can improve the situation with gas supplies to Transnistria.

On the other hand, if Gazprom follows through on its threat to cut supplies to Moldova, it could backfire. “If we talk about the scenario of zeroing supplies, of course, Pridnestrovie will suffer greatly from this situation,” says Sergey Kondratiev from the Institute of Energy and Finance. the state of emergency is in effect.”

Transit through Ukraine is the last remaining route for deliveries of Russian pipeline gas to Western European markets. The Russian Federation gradually reduced gas supplies to the continent after the outbreak of hostilities in Ukraine. First, gas transit through the Yamal-Europe gas pipeline and Nord Stream was completely stopped, then Nord Stream and Nord Stream-2 were blown up. Deliveries to the Balkans and Hungary are also being carried out via the Turkish Stream.

Due to concerns about the continuation of supplies through Ukraine, December futures at the main European gas hub TTF rose on November 22 by 7% to €124.5 per MWh. Prices are also affected European Commission statement about the intention to introduce a gas price ceiling in Europe at the level of €275 per MWh.

Tatyana Dyatel