Public debate: Gas pipeline between politics, economy and chance to live better

Press Release
on the organization of the debate
Gas pipeline between politics, economy and chance to live better”. Developing Political Culture through Public Debates”. Public debates series held by the news agency IPN in its conference room with the support of the German Foundation “Hanns Seidel”

Held on 29 September 2020, Debate No.153 brought together: Victor Parlicov, the ex-director for the National Agency for Energy Regulation, energy security expert Sergiu Tofilat, president of the WatchDog Community and Igor Boțan, IPN project’s standing expert.

The Iasi-Chisinau gas pipeline had been built during a long period of time and with difficulty, but until recently generated many hopes and expectations, including as regards the chance for a better life. However, together with its putting into operation, it turned into a problem. In a somehow unexpected way, it turned out that the gas pipeline cannot or should not be used permanently to transport gas, eventually cheaper, from Romania or from the European area in general. According to the authorities, it is rather a “reserve” pipeline that can be used in emergencies, but this is not mandatory. Such aspects as how real the problem of utilization of the new gas pipeline is, which are the reasons, components and effects of this problem were discussed by experts who took part in IPN’s
public debate “Gas pipeline between politics, economy and chance to live better”.

Igor Boțan, the standing expert of IPN’s project, said that after Vladimir Putin was elected President of the Russian Federation, this country pursued the strategic goal of becoming an energy superpower. At the same time, in 2003-2009, the European Union, realizing that the very great energy dependence on the Eastern supplier can bring problems, worked out the so-called energy packages. These envision all the mechanisms for blocking the energy dependence on a monopolist supplier that, besides producing gas and transporting this, wants to control the gas distribution networks in the EU.

“In 2009, the Republic of Moldova accepted to join the European Energy Community, while in October 2011, Chisinau hosted the meeting of the Ministerial Council of the Energy Community. Then the Republic of Moldova signed an agreement by which it undertook to implement the Third Energy Package,” explained Igor Boțan. According to him, this energy package was to be implemented until 2015, but this wasn’t done. However, laws on natural gas and electrical energy were adopted meanwhile.

The expert said that in August 2013, there was signed the agreement on the building of the Iasi-Ungheni gas pipeline, with the first part of this being constructed during a year. The Ungheni-Chisinau gas pipeline was finished only this year. “Now we have this strategic pipe that can annually transport 1.4 billion cubic meters of natural gas to the Republic of Moldova. This would be sufficient for Moldova’s needs,’’ stated Igor Boțan.

Sergiu Tofilat, president of the WatchDog Community, said that Moldova’s energy strategy was adopted 20 years ago. The document highlighted the danger of Moldova depending on Russian gas both in ensuring the necessary natural gas and in producing electrical energy. “The main objective pursued by the political decision makers of Moldova was to annihilate the danger of our dependence on Russian gas in gas consumption and in electricity production. The decision to build this pipeline, which came later, was one of the options how to solve this problem as the sustainability of the separatist authorities from the left side of the Nistru actually depends on the solving of this problem because the Russian Federation aims to achieve its objectives to finance the separatist regime through gas supplies. We pursue the objective of not depending on one supplier and of not being vulnerable to the Kremlin administration,” said the expert in energy security.

According to him, at the start of 2000 the Russian company “Gazprom” stopped the gas supplies to Ukraine and Moldova and imposed several conditions that he considers abusive. The first condition was to immediately pay off the debt for gas whose largest part was accumulated by the consumers from the left side of the Nistru. Moscow wanted to make this Moldova’s burden. The second condition was not to allow any other gas suppliers to enter the Moldovan market, while the third condition was to pay for gas in advance. To end this dependence, a strategy was adopted in 2000. Later, in 2007, there was adopted a new strategy valid until 2020. A new natural gas crisis was witnessed in 2009 following a conflict between Russia and Ukraine that led to a halt in the supply of gas in winter. The authorities then considered an alternative solution in the purchase of gas and the project of interconnection through the Iasi-Ungheni gas pipeline followed. The works to build the infrastructure up to Chisinau were completed only in 2020. The works on the territory of Romania are yet to be finished.

Victor Parlicov, energy policy expert of the Institute for Development and Special Initiatives “Viitorul”, said the newly built gas pipeline will play a reserve role. But it could be yet used when the works on the right side of the Prut River are over. It could be used in Romania by commercial suppliers, but there are technical aspects that limit the possibility of using this pipeline. This interconnection was conceived as a security project. “Security is evidently related to politics and is strictly related even to geopolitics. What we must understand is that the Transnistrian region is the main strategic vulnerability of the Republic of Moldova, to my mind, while the so-called “Transnistrian independence” survives mainly due to the free gas that is supplied to the Transnistrian region. When gas stops to be supplied free to the region and they will have to pay, half of their budget, their economy will be seriously affected,” explained the ex-director for the National Agency for Energy Regulation.

The expert expressed his skepticism about the interconnection through the Iași-Ungheni section. According to him, it was easier, cheaper and faster to ensure the reverse flow of gas through the existing Trans-Balkan gas pipeline. During practically all the governments, nothing real was done and the Iasi-Ungheni agenda represented a diversion from the start. “In reality, security is ensured through reverse flow through the Trans-Balkan pipeline. We have made a fuss during ten years. I’m glad that the Moldovan authorities in 2020 admitted that the value of this gas pipeline is more of a reserve pipeline, a kind of way-out in critical moments,” he stated. He added that southern Moldova is supplied with gas by connection to the Trans-Balkan pipeline. The gas from Chisinau physically cannot reach the southern districts. This way, in the best case the Iasi-Chisinau gas pipeline will save northern Moldova and Chisinau. In such conditions, the strategic value of this pipeline from the viewpoint of security is much lower than the value of the Trans-Balkan pipeline.

The public debate “Gas pipeline between politics, economy and chance to live better” was the 153rd installment of the series “Developing political culture through political debates” that is supported by the Hanns Seidel Foundation.

The Agency published 4 news stories on the debate (see the English version of
www.ipn.md): on 29.09.20, „ Gas pipeline between politics, economy and chance to live better, IPN debate” -  https://www.ipn.md/en/gas-pipeline-between-politics-economy-and-chance-to-live-better-8004_1076492.html; „ Victor Parlicov: Gazprom will have to sell gas cheaper to Moldova so as to cope with competition” - https://www.ipn.md/en/victor-parlicov-gazprom-will-have-to-sell-gas-cheaper-to-8004_1076495.html ; „ Sergiu Tofilat: Iasi-Chisinau gas pipeline does not solve problem of dependence on Russian gas” - https://www.ipn.md/en/sergiu-tofilat-iasi-chisinau-gas-pipeline-does-not-solve-problem-8004_1076496.html ; „ Igor Boțan: Existence of Iasi-Chisinau gas pipeline is a very important thing”- https://www.ipn.md/en/igor-botan-existence-of-iasi-chisinau-gas-pipeline-is-a-8004_1076497.html

Valeriu Vasilica, director of IPN

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