Gas

Implementation indicators

  • Unbundling

    Unbundling

    Moldova’s derogation for transmission system operator unbundling expired on 1 January 2020, but certification is still outstanding. None of the existing transmission system operators have been certified.

  • Third Party Access

    Third Party Access

    Moldova’s national regulatory authority, ANRE, adopted a list of entry/exit points and established a provisional tariff for natural gas transmission services. Gas Network Codes have been transposed. However, third party access in practice is incomplete, as reverse flow (backhaul) is absent. Capacity allocations are not performed in line with the Network Code on CAM.

  • Wholesale market

    Wholesale market

    Gas market rules have been adopted. Yet, Moldova’s gas market is still illiquid, monopolised and without a virtual trading point. REMIT is not transposed.

  • Retail market

    Retail market

    The retail market is still heavily regulated. Supply under public service obligations and last resort is offered to all customers, without adequate eligibility criteria for such supply. ANRE’s public service obligation decision envisages a seven year period for supply at regulated prices.

  • Interconnectivity

    Interconnectivity

    Gas flows through Moldova have drastically changed in 2020. The transmission system operator Moldovatransgaz has concluded an interconnection agreement with Ukraine. Security of supply rules are well defined.

State of compliance

During this reporting period, Moldova experienced important changes in its regulatory framework and the pattern of gas flows. Although the country is still supplied through the traditional route from Ukraine and exclusively by Gazprom, it no longer transits vast gas quantities to downstream markets of the Balkans and Turkey, which resulted in a drop of transit quantities by 20 times. This has opened up opportunities for trading and physical flows from the south to the north towards Ukraine. This potential, however, still remains untapped due to the lack of unbundling of the incumbent company, Moldovagaz, with Gazprom as dominant shareholder, and an incomplete legal framework.

Currently, amendments to the Gas Law and other related legislative acts are being drafted to enable full reforms of the market and rectify shortcomings related to public supplies and reverse flow, as identified by the Secretariat in previous years.

In February 2020, an unbundling plan proposed by the gas incumbent Moldovagaz was adopted by the regulator ANRE. The plan envisaged application for certification by its daughter company Moldovatransgaz under the independent transmission operator model by October 2020. However, although the bulk of the work on preparatory documents has been done and consulted with the Secretariat, the plan’s realisation has slowed down in the autumn of 2020, and ANRE granted an extension for four months.

Third party access to users which do not belong to Moldovagaz’ shareholders is missing, only a draft transmission contract exists. Backhaul (contractual reverse flow) is still not offered by Moldovatransgaz.

The other infrastructure company, Vestmoldtransgaz, owned by the Romanian transmission system operator Transgaz, is not operational nor certified.

After several years of assistance to ANRE by the Secretariat, all gas Network Codes have been adopted. This was an important achievement during this reporting period, but the implementation of the Codes in practice remains very limited. In December 2019, Moldovatransgaz concluded an interconnection agreement with Ukraine in line with the Network Code on Interoperability and Data Exchange Rules.

ANRE has adopted a list of entry/exit points, with provisional tariffs for natural gas transmission services in place. The full regulatory period is excepted to start this year. A major dispute between Moldovagaz and ANRE on the level of losses in the distribution grid was resolved successfully under the Secretariat’s Dispute Resolution and Negotiation Centre.

At the wholesale level, no changes are visible in Moldova’s gas market. It remains illiquid and foreclosed. Although gas market rules were adopted in 2019, they have not been implemented. Moldovagaz is responsible for gas imports from Russia and exercises control over two gas transmission system operators, Moldovatransgaz and Tiraspoltransgaz. On the retail market, all final customers are supplied under regulated prices. Moldovgaz acts as a public supplier, appointed without a competitive procedure. Unlimited and untargeted public supplies are one of the
main obstructions to market opening.

Moldova has adopted the full of set of security of supply rules, which even go beyond the existing Energy Community acquis.

The ongoing changes in the gas flows of Southeast Europe will open up opportunities for increased security of supply and competition in Moldova. Although the country has updated its secondary regulatory framework in gas, primary legislation needs to follow suit. The major challenges remain: finalizing the unbundling of its transmission operators despite the slow-down, and accelerating efforts to make its market more liquid. In this respect, Moldova may benefit from increased market liquidity in neighbouring countries, especially Ukraine.