Gazprom takes Moldova to court over unpaid gas bill
Thursday, Mar 16, 2017
Gazprom has sued Moldova’s national gas grid operator Moldovagaz in Russia’s International Commercial Arbitration Court demanding payment of US$768.6 million for natural gas supplied in 2014. The Russian gas giant filed the suit in February, according to a prospectus it issued for an upcoming Eurobond issue. No date has been set yet for the hearing.

This is the third time the companies will face off in court. Gazprom sued Moldovagaz twice in a Russian arbitration court over debts from 2012 and 2013. The Moldovan company owed Gazprom US$562.3 million for 2013 and over US$800 million for 2012. The court ruled in Gazprom’s favour both times. The latter ruling was made in September 2016.

Gazprom is Moldova’s only gas supplier, delivering about 3 bcm of gas to the former Soviet state in 2016 at an average price of US$190 per 1,000 cubic metres. The Russian also company owns a 50% share in Moldovagaz. In April of last year, Moldovagaz announced 2015 losses of US$158.4 million. Gazprom representatives have contacted authorities in Chisinau regarding refinancing the debt, RIA Novosti reported. The country’s debt dates back to the 1990s.

In December, Gazprom renewed its contract with Moldovagaz for the supply and transit of gas across its territory for three years. Moldovan Prime Minister Pavel Filip stated at that time that the utility was keeping up with gas payments. Gazprom promised that it would guarantee deliveries to Moldova regardless of transit conditions in Ukraine and Moldova promised to pay for all gas delivered.

Moldovan President Igor Dodon met with Russian President Vladimir Putin and Gazprom head Alexei Miller in Moscow in January. Dodon said in an interview on Moldovan radio after his return that the country’s total debt to Gazprom came to US$6.5 billion. Of that sum, US$6 billion was the debt of the Left Bank, that is, the separatist state of Transnistria.

That debt could only be discussed in the context of a settlement, Dodon said. The debt belonging to Moldova proper may be compensated with some of the assets owned by Moldovagaz, he added. The proposal was rejected by Russia, which views the debts of Moldova and Transnistria as indistinguishable.

Moldovagaz is understood to deliver gas to Tiraspoltransgaz, a company based in the unofficial Transnistrian capital of Tiraspol. Tiraspoltransgaz, which is rumoured to be partly owned by Gazprom, charges its customers for gas but does not pay Moldovagaz for the supplies.

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