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26/08/2016

Gazprom monopoly broken in Moldova

Europe's East

Gazprom monopoly broken in Moldova

Warning Gas Pipeline. [Alexander Baxevanis/flickr]

The Republic of Moldova has broken Moscow-backed Gazprom’s gas monopoly after completing the first phase of a new pipeline connecting it to the EU energy market.

The part EU-funded Ungheni-lasi pipeline between the east of Romania and west of Moldova  provides the first alternative to Gazprom gas in the former Soviet state.  

Gas in Romania, an EU member state, is 40% cheaper than in Moldova, which will receive about 50 million cubic metres of gas a year at unregulated tariffs.

That only covers  5% of Moldova’s total needs and is a fraction of the 11 billion cubic metres  Romania produces annually.

But once finished,  the 43 km pipeline could reach an annual capacity of 1.5 billion cubic metres  and fully cover Moldovan needs.

This could decrease Gazprom’s energy prices and make Moldova less vulnerable to the Russian pressure.

Russia has put the pro-European Moldovan government under increasing pressure since it signed an association agreement  with the EU last year, including cutting gas supplies. Embargoes on Moldovan goods were also stepped up in the aftermath of the Ukraine crisis.

The association agreement deepens political and economic relations with the EU, which will pay €17million towards the project’s completion.

Romania’s  Prime Minister Victor Ponta,  EU Energy Commissioner Günther Oettinger and  Moldova’s Prime Minister Iurie Leanc?, yesterday attended a ceremony to mark the completion of the first phase of the project, which cost €26 million and started in August last year.

The second phase is to build a compressor station in Romania, and extend the pipeline from Ungheni to Chisinau, the Moldovan capital. The EU will pay a further €10 million for the second phase.

Leanc?, speaking on the Moldovan 23rd anniversary of independence from the Soviet Union, said that by developing an interconnected system Moldova will be able to buy gas either from the East or the West.

Oettinger reiterated the importance of integrating Moldova in the EU’s energy infrastructure at the event and the EU’s support in developing an independent energy sector in the region.

http://www.euractiv.com/europes-east/russia-keeps-threatening-neighbo-news-530198

Russian Deputy Prime Minister Dmitry Rogozin has warned Moldova that signing an association agreement with the European Union would have “serious consequences” for the country’s future, echoing similar threats levelled at Ukraine.

In the past year, Moldova took steps towards European integration by signing and ratifying the Association Agreement, including the Deep and Comprehensive Free Trade Area. Moldova is also a full member of the Energy Community Treaty since 2010.  

Background

Moldova is a former Soviet republic and was part of Romania before being annexed by the Soviet Union in World War II. It is landlocked between Romania and Ukraine. Since 2009, Moldova has a pro-European government that has set the country on the course to European integration. 

In November 2013, Moldova and Georgia signed an agreement with the EU to deepen political and economic relations and gradually integrate its economy into the EU's internal market. 

Timeline

  • 30 November 2014: Moldovan Parliamentary elections 

Further Reading