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Moldova chooses alternatives to Russian gas

·2-min read
The logo of Moldovagaz energy company is on display in Chisinau

By Alexander Tanas

CHISINAU (Reuters) - Ex-Soviet Moldova has selected seven companies to secure gas from next month should supply from Russia's Gazprom, be disrupted, a senior government official said.

Deputy Prime Minister Andrei Spinu, who has led Moldova's team of negotiators in talks with Gazprom through a year of steep price increases, told a Moldovan television programme late on Monday that the Russian giant was "unpredictable".

Moldova can draw on 300 million euros put up by the European Bank for Reconstruction and Development in the event of a break in Russian supply, he told JurnalTV.

"For now we have chosen seven companies. Gazprom is not among them," Spinu said.

State gas company Moldovagaz said on Tuesday it had paid for August deliveries and was due to make its 50% advance payment for September amounting to $33.89 million, though a senior company source told Reuters it was uncertain it had the funds to do so.

One of Europe's poorest countries, Moldova is heavily reliant on Russian gas, and has been hit hard by the increase in spot gas prices since Russia's invasion of Ukraine in February.

Sandwiched between Ukraine and European Union member Romania, Moldova is pressing on with a bid to join the EU under pro-Western President Maia Sandu. Ukraine also wants to join.

Moldova has said Gazprom could cut off gas if one of the contractual conditions is not met - completion of an audit of its accumulated debt for supplies estimated at $709 million.

"We will learn of its decision on supplying gas in October on the last day, perhaps in the last few hours," Spinu said.

But a former deputy prime minister cast doubt on the government's contingency plan.

"In terms of price, Moldova has no alternative to gas from Gazprom, which will always have a lower price," Ion Chicu said.

He said that under the complex price formula established with Gazprom, which references the price of oil products, levels for October would decline to $1,200-1,300.

Prices on the open market now stand at just below $2,000 per 1,000 cubic metres.

On Monday, Moldovagaz asked the country's energy regulator for permission to raise gas prices for consumers by 31.5%.

The move was announced by Moldovagaz head Vadim Ceban in a post on Telegram, with the proposed new price being 26,675 Moldovan lei ($1,382) per 1,000 cubic metres.

With winter approaching Moldova's 3.5 million people are enduring serious economic difficulties associated with energy prices, the cost of which has increased by 29% in September after surging by almost 50% in August.

Thousands massed by government headquarters on Sunday to denounce high prices and demand the resignation of Sandu and her government in the largest protest since her election in 2020.

(Reporting by Ronald Popeski; editing by Jason Neely)