Moldova signs contract with Poland for ‘trial purchase’ of gas ahead of crunch negotiations with Russian energy giant Gazprom

Moldova has signed a contract with the Polish state-controlled energy company PGNiG for a small one-off purchase of natural gas after Chisinau failed to agree on a supply contract with Russia’s Gazprom, its traditional supplier.

On Monday, Moldova announced that it had put pen to paper on a deal for one million cubic meters of natural gas, in what it dubbed a ‘trial’ to test the ability to import gas from other countries.

Earlier this month, the Moldovan authorities declared a state of emergency after the country failed to come to terms with the energy behemoth Gazprom over a new gas supply contract. The two parties are yet to extend their agreement, which expired in September after Chisinau baulked at the proposed cost of $790 per 1,000 cubic meters. The expired contract, signed when the price of natural gas was much lower, charges Moldova just $200. A temporary one-month extension, at the higher spot price, has been agreed upon while negotiations continue.

Further adding to the problem is Moldova’s lack of storage, meaning it needs to import all the gas it needs.

However, with the next stage of negotiations due to take place on Wednesday in St. Petersburg, Chisinau is looking for other sources of supply. The deal with Poland is the first purchase of natural gas from an alternative supplier in the history of Moldova. The new agreement of one million cubic meters is just a dent in the 1.1 billion the country requires every year.

Following failed negotiations with the Moldovan authorities earlier this month, Gazprom revealed it would stop deliveries from December 1 unless a new contract is signed. The Russian company also offered a 25% discount on the condition that Chisinau pays back the accumulated debt of about $700 million for gas supplied in previous years. Moldova is looking for a significantly larger discount, and disagrees with the debt amount quoted by Gazprom.

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