Moldova is facing a halt to Russian gas supplies from 1 December, with Russian state-controlled gas monopoly Gazprom blaming Moldovan authorities for the breakdown in talks in Moscow over a new supply agreement.

Gazprom spokesperson Sergey Kupriyanov has been quoted as saying in Moscow that Gazprom is demanding Moldova makes a firm obligation to pay its debts for historic gas supplies, which according to reports in Moscow relate to the period between 2011 and 2015.

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Together with accrued interest and fines, the company expects Moldova agrees to repay about $700 million within the next three years, according to Kupriyanov.

Gazprom will be ready to sign the new supply agreement with Moldova once the debt is settled, he added.

Kupriyanov said that after a long-term agreement between the two countries expired on 30 September, Gazprom agreed to extend deliveries for October and is ready to continue supplying volumes during November.

“However, there are boundaries of patience and Gazprom can not continue to work at loss,” he added, referring to the 1 December deadline for the two sides to agree a new contract and pricing terms.

Moldova has been importing about 3 billion cubic metres per annum of gas from Gazprom, which reaches the country via southern Ukraine.

Gazprom has reduced its gas transit volumes across Ukraine since 1 October, arguing that countries in southern Europe and the Balkans may now receive Russian gas via its new TurkStream subsea pipeline in the Black Sea.

However, for Russian gas to reach Moldova via the new route, it will now have to transit Turkey, Bulgaria and Romania.

Price disagreements

Moldova Deputy Prime Minister Vladislav Kulminsky, who visited Moscow last week, said that even after a 25% discount agreed by Gazprom, the nation will import Russian gas at an estimated price of $590 per thousand cubic metres over the next several months.

The country is understood to have paid about $150 per thousand cubic metres of Russian gas earlier this year, and aims to agree to pay no more than $300 per thousand cubic metres to Gazprom under the new supply contract, according to reports in Moscow.

Reports in Kiev said that Moldova has already asked Ukraine about a possibile temporary supply of 15 million cubic metres per day of gas from its vast underground storage facilities.

Kiev proposal

Authorities in Ukraine have yet to respond to the request. However, President Vladimir Zelensky promised Gazprom a 50% discount if the company contracts to deliver up to 151 MMcmd of additional gas to Europe to ease the region's supply crisis.

Moldova has a population of about 2.6 million people and lies between Ukraine and Romania. It had been long headed by a pro-Russian leader until the end of 2020 when pro-European Maya Sandu was elected president.

With the Sandu-led political party, Action & Solidarity, winning the majority of seats in the country’s parliament this past summer, the country has started to adapt its domestic market to European gas market regulations, known as the Third Energy Package.