Moldovagaz expects more than 90% drop in revenue after losing gas supply license

CHISINAU. July 30 (Interfax) - The revenue of JSC Moldovagaz, over 60% of whose shares are controlled by Gazprom , will drop more than 90% after the company is stripped of its license to supply natural gas to end consumers in Moldova, the company's acting board chairman Vadim Ceban said.

"From a business perspective, Moldovagaz is losing sales. Sales amounted to 10 billion lei [per year], but will now be reduced to several hundred million lei," Ceban said when commenting on the impact of the decision by Moldova's National Agency for Energy Regulation (ANRE) to transfer the functions of the public gas supplier in the country from Moldovagaz to the state-owned company Energocom, effective August 1 this year. A video of Ceban's statement was posted on his Telegram channel.

In the future, the company will continue its operations as a provider of gas distribution services, with gas purchased by Energocom, Ceban said. "We will remain responsible for providing services, not for supplying gas," and Moldovagaz and Energocom are currently finalizing the relevant contract, he said.

Ceban expects the company to continue operating as a service provider for at least one year under the contract with Energocom.

At the same time, he did not rule out that Moldovagaz may continue performing gas supply functions in August. "Negotiations are underway for Moldovagaz to ensure gas supplies in August. Moldovagaz has a gas supply contract with Energocom. In August, gas will be supplied either by Energocom or Moldovagaz," he said.

Commenting on the possible reaction of Gazprom as a shareholder to the current situation, Ceban said, "I don't see what influence Gazprom can have. Right now, the important thing is to sign the contract with Energocom."

As before, Ceban expects Moldovagaz to retain its intermediary role in gas supplies to Transdniestria after August 1. "Today, Moldovagaz has several contracts with Tiraspoltransgaz, as well as a contract with an external supplier. This function, based on our information, should remain with Moldovagaz. We will see what decision the Moldovan authorities make, but the current model is functional - Transdniestria receives gas," he said.

It was previously reported that, under the ANRE's decision, Energocom would begin supplying gas to Moldova starting August 1, replacing Gazprom's subsidiary, JSC Moldovagaz.

Moldovan Prime Minister Dorin Recean previously confirmed the authorities' decision, which is linked to Chisinau's obligations to implement the EU's Third Energy Package prohibiting monopolies on the supply, transportation and distribution of energy resources.