With Romanian gas, Moldova seeks energy independence from Russia

Wed Aug 27, 2014 1:12pm EDT

Related Topics

* Small supplies of Romanian gas, but big potential

* Moldova reliant on Russian gas, but pursuing EU ties

* Pipeline launched against backdrop of supply fears in Europe

By Luiza Ilie

ZAGARANCEA, Moldova, Aug 27 (Reuters) - Moldova took a small but symbolic step towards easing its reliance on Russian gas imports on Wednesday when it inaugurated a pipeline that will bring in Romanian gas from next week.

With fears mounting of a winter cut-off in gas supplies to Europe from Russia over the conflict in Ukraine, the prime ministers of Moldova and European Union member Romania formally unveiled the 43-km (27 miles) pipeline on the 23rd anniversary of Moldova's independence from the Soviet Union.

The government led by Moldova's pro-Western prime minister, Iurie Leanca, signed up to closer ties with the EU earlier this year, defying warnings from Russia and joining ex-Soviet peers Ukraine and Georgia in pulling away from Moscow.

"Today is a very important date for Moldova's energy independence," Leanca told a crowd of about 200 people - among them EU Energy Commissioner Guenther Oettinger - gathered in a field near the Moldovan village of Zagarancea.

"In a maximum of two years our energy system will be perfectly interconnected with Europe and we will be able to buy gas either from the East or West."

Initially, the pipeline will carry about 50 million cubic metres of gas a year to Moldova, a fraction of Romania's annual production of about 11 billion cubic metres and covering about 5 percent of Moldova's total needs.

But the pipeline has the potential to carry 1.5 billion cubic metres, which could cover Moldova's needs, providing Romania invests further in stations to boost pressure and Moldova extends the pipeline another 104 km to the capital Chisinau.

The inauguration comes against a backdrop of fresh fears of disruptions to Russian gas supplies to Europe, via Ukraine, over the coming winter.

Ukrainian Prime Minister Arseny Yatseniuk said on Wednesday Kiev knew of Russian plans to halt gas flows to Europe this winter, which Moscow denied.

Russian gas flows to Ukraine have been halted three times in the past decade due to price disputes, and flows to the EU were disrupted in 2006 and 2009 after Ukraine took some of the gas intended for the bloc to meet its own winter demand.

The EU provided about a third of the 26 million euros ($34 million) it cost to build the pipeline connecting the eastern Romanian city of Iasi to the small Moldovan town of Ungheni.

Moldovans gathered in the field said they hoped the pipeline would help boost their economy, one of the poorest in Europe, and bring down energy prices.

"When there are two competitors in a market, the buyer wins," said 42-year-old Alexei Ghebos, a public employee from a nearby village. (1 US dollar = 0.7582 euro) (Editing by Matt Robinson and Michael Urquhart)

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