Moldova plans to implement EU gas laws

Moldova plans to fully implement the EU's third energy package rules from 2021 and revise cross-border tariffs.

This could increase market interest and facilitate cross-border flows between Ukraine, Moldova and other regional markets, participants said at the Ukrainian Gas Forum in Kyiv.

Moldova's plans to implement EU rules are part of its obligation as a member of EU-led regional regulatory body the Energy Community, the head of state-owned supplier Moldovagaz, Vadim Ceban, said. This includes unbundling transmission system operator Moldovatransgaz from Moldovagaz and operator certification by the Energy Community in line with EU standards. The plans also call for Moldovagaz to separate its import and trading operations from final supply to Moldovan consumers.

The firm aims to meet these unbundling requirements by the end of 2021.

Gas transport in Moldova is carried out by two operators, Moldovatransgaz and Tiraspoltransgaz, which operates within the autonomous Transnistria region.

There are 22 suppliers active in Moldova this year, including foreign traders, Ceban said. This is up from 10 last year, he said. Moldovagaz remains the country's dominant supplier, with a 98.1pc market share, responsible for supply of 1.06bn m³ in 2019. Food production and glass manufacturing are among the largest industrial gas users in Moldova.

Private companies in Ukraine and Romania have expressed "significant interest" in using the Moldovan transport system, Ceban said. Transport through the country between these markets will be about 3bn m³ next year, he said. Cross-border tariffs for 2021 will fall to $4.50/'000m from the $10.00/'000m³ this year because of higher network use, he said.

Future cross-border tariffs will be calculated based on transit volumes, rising with lower transit volumes (see tariffs table). And these tariffs will be the same for all market participants from 2021, Ceban said, which is is not currently the case.

The company plans to sign interconnection agreements covering all points of entry into its network. It already signed interconnection agreements with Ukraine's transmission operator GTSOU late last year at Grebenyky, Caushany, Oleksiivka, Ananyiv and at a virtual point for delivery to Moldovan consumers near the border. It also intends to sign an agreement at the Limanske border point. But Moldovagaz's main task is to sign an agreement with Romanian operator Transgaz, Ceban said. The two countries are linked by the Trans-Balkan pipeline (TBP) and a smaller pipeline at Ungheni.

The commission has pushed Transgaz to address its failure to facilitate exports. But if the operator does not address these failures, it could continue to hinder cross-border flows in the region despite any reforms in Ukraine and Moldova.

The TBP was used to send Russian gas to southeastern European markets and on to Turkey through Ukraine until early this year, when the 31.5bn m³/yr Turkish Stream pipeline was launched. Russia's state-controlled Gazprom still sends gas along the TBP, but only to Moldova and Romania. As a result, total flows — and Moldovatransgaz's transit revenues — have fallen sharply (see graph).

Private firms have also been able to use the route since 1 January. But traders said that combined cross-border tariffs, which include three sets of entry and exit fees at Grebenyky, Caushany and Isaccea-Orlovka I, discouraged trading along the route.

Moldova will also change its capacity booking platform to the Regional Booking Platform (RBP), and will switch measurement of gas in its transport system to energy units from volumetric space, Ceban said. The country will establish a balancing entity and implement daily balancing procedures.

Ukraine has implemented most aspects of third energy package obligations in recent years, including unbundling of former system operator Ukrtransgaz from parent company state-owned supplier Naftogaz. The country has made particularly strong progress in the implementation of European gas market rules, European energy traders association Efet said yesterday.

By Victoria Dovgal and Paul Martin

Transit dynamics through Moldova bn m³