Gazprom Will Halt Gas Supplies to Moldova Amid Debt Dispute

(Bloomberg) -- Russia’s Gazprom PJSC will halt natural gas supplies to Moldova starting on Jan. 1 due to an alleged debt impasse amid a state of emergency in the Eastern European nation’s energy sector.

The notification sent to Moldovagaz on Saturday said the company “regularly fails to fulfill its payment obligations under the existing contract, which is a significant breach of its terms,” the Russian gas giant said in statement on Telegram. 

Gas flows to Moldova will be reduced to zero from 8 a.m. Moscow time on Jan. 1, with the restriction remaining in force until Gazprom “notifies Moldovagaz in writing otherwise,” according to the statement. 

In the past two years, all of Moldova’s gas imports from Gazprom — equating to 5.7 million cubic meters a day — has been delivered to the nation’s pro-Russian breakaway region of Transnistria, which turns the fuel into electricity for the rest of the country.

Gazprom’s decision “once again confirms the Kremlin’s intention to leave the residents of the Transnistrian region without electricity and heat in the middle of winter,” Moldova’s Prime Minister Dorin Recean said in a Facebook statement. “Russia uses energy as a political weapon, turning the people in the Transnistrian region, which it controls through its illegally stationed military forces, into hostages.”

Moldova in November called on Western countries to provide financial support amid concerns Gazprom will cease supplies to Transnistria, which is dependent on Gazprom’s deliveries sent via Ukraine. 

That leaves pro-Russian region vulnerable as a transit deal between Russia and Ukraine expires at the end of the year and the leaders of both nations ruled out the renewal of the agreement. Earlier this week, Russian President Vladimir Putin cast further doubt on the likelihood of a deal to maintain flows via Ukraine.

Gazprom is demanding $709 million for gas already supplied as well as late payment penalties. The Russian gas producer is a majority shareholder in Moldovagaz and Moldova’s government holds a 35% stake. Of that amount, the country recognizes about $8 million; its prime minister has called the debt claimed by Gazprom “non-existent.” 

Moldova’s government “will carefully analyze legal options, including resorting to international arbitration,” to protect its national interests and “seek compensation for the Kremlin’s decisions, which cause economic losses and impact the safety and security of the citizens of Moldova,” Recean said on Saturday. 

The Eastern European nation has diversified its natural gas supply sources to reduce dependence on a single supplier for the territory excluding Transnistria, according to Recean. 

Following Gazprom’s notification, Moldovagaz head Vadim Ceban said in a Telegram statement that the company “has contracted the necessary volumes of gas, which will fully ensure all consumption” of Moldova, excluding Transnistria, for the first quarter of 2025.

Sergei Obolonik, self-proclaimed economy minister of Transnistria, said this week that the region’s main power plant will switch to coal if gas supplies dry up, and that they have reserves for about 50 days. 

(Updates with Moldovan premier’s statement from fifth paragraph.)

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