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Republic of Moldova declares an end to energy crisis after Gazprom extends contract

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The Republic of Moldova‘s President Maia Sandu has declared an end to her country’s energy crisis after the government and Russia‘s state-controlled Gazprom agreed to extend a contract for natural-gas supplies for a period of five years, according to RFE/RL.

Russian gas began flowing to the Republic of Moldova on Monday under the new contract with Gazprom after disagreements between the sides over the price triggered severe shortages in the country.

“I believe that the gas crisis ended when a contract was signed between Moldovagaz and Gazprom,” Sandu told Russian newspaper Kommersant.

The Republic of Moldova declared a state of emergency last month and started buying gas from other countries after its contract with Gazprom, the largest supplier of gas to Europe, expired at the end of September and the two sides failed to agree on details and pricing of a new long-term deal.

In a breakthrough on October 28, the Republic of Moldova’s government and Gazprom announced a new price formula for a five-year agreement to keep gas flowing.

Deputy Prime Minister Andrei Spinu, who led the Republic of Moldova’s talks with the gas giant said on Monday that the country will pay almost half the current market price for gas.

“We managed to get a favourable gas price for our country as in December it will decline to below $400 per 1,000 cubic meters, in November the price is $450, though the market price averages $900-$940 now,” stated Spinu.

One of the key issues in negotiations was Moldovagaz’s debts for previous gas supplies that Russia estimated at more than $700 million.

Gazprom and the government in Chisinau agreed to audit the debt and to renegotiate debt payments, according to the Republic of Moldova’s side.

Traditional supplier Russia had been threatening to cut off gas supplies to the impoverished country sandwiched between EU member Romania and Ukraine at the end of the year if the existing gas contract was not extended by then.