Cheaper Russian Gas for Moldavia: Generosity or Political Calculation?

The agreement between Russian "Gazprom" and Moldavian "Moldovagaz" companies on the supply of Russian gas to Moldavia during the first quarter of 2006 at $110 per 1,000 cubic meters of gas has caused a lively discussion in Moldavia's expert community.

On the whole, the deal has been assessed in Kishinev positively. Earlier, "Gazprom" offered to sell gas to Moldavia at the price of $160 per 1,000 cubic meters. However, under the agreement the gas price may be revised upward in April, which gives the experts certain skepticism.

Also, many people in Kishinev feel uneasy about Moscow's unexpected generosity. Moldavian political analysts do not rule out that the government has made some political concessions on the Cis-Dniestrian issue or on Moldavia's European integration.

"It is not quite clear yet what Kishinev offered to "Gazprom" and to Russia in general. Besides, these 110 dollars are just a provisional solution, it applies only to the first quarter of this year. What will follow, is not clear yet. I am not sure that Kishinev would be ready, for example, to surrender its assets in Cis-Dniestria. Of course, from the economic point of view, it would not entail any losses, as Kishinev does not control those assets anyway. But, on a political plane, I believe it may have rather serious consequences", says Valery Prokhanitski, director of the Moldavian independent analytical center "Expert Group".

Despite varying viewpoints on the problem of the Russian-Moldavian gas cooperation, experts are united in believing that Moldavia would not be able to solve, within the next two or three years, the problem of diversifying its energy resources and would continue to depend on Russian fuel. In 2005 "Gazprom" supplied 2.45 billion cubic meters of gas to Moldavia, while the arrears of Moldavian gas consumers, without counting overdue payment penalties, came up to about $780 million, including $560 millions in Cis-Dniestria.