Romanian BRM exchange launches gas and power bourse in Moldova

On 26 October Romanian energy exchange BRM told ICIS it had launched a company in Moldova to provide balancing, spot and forward markets for natural gas and electricity from the start of 2022.

The news came just hours after Polish state-owned supplier PGNiG and Ukrainian-US ERU were due to supply the first 1 million cubic metre (mcm) of non-Russian gas to the country.

Speaking to ICIS, BRM president Gabriel Purice said the new exchange – BRM East Energy – had all necessary equipment in place and was ready to host trading operations at the beginning of next year

The launch date for gas trading hinges on Moldova’s energy regulator ANRE clarifying existing legislation related to the balancing market, he said.

Purice said BRM was working with the European Bank for Reconstruction and Development (EBRD), as well as the Energy Community, to help the watchdog finalise the legal framework for gas balancing.

Moldova is a contracting party of the Energy Community, an institution working to extend EU energy market principles to neighbouring non-member countries.

After regulatory aspects are clarified the exchange will be able to operate the balancing market and offer day-ahead, intra-day, front month, front quarter and front year contracts.

Purice said the bourse could also offer products for electricity trading but said that competition was limited.

This is because the Moldovan power market is dominated by a major supplier in Transnistria, an unrecognised breakaway state located between the Dniester river and the Ukrainian border.

Competition in the gas market is also low, but Purice is confident it could build up as Moldova now has interconnectors with Romania and Ukraine via the Trans-Balkan line, as well as the new 1.5 billion cubic metre per year capacity Iasi-Ungheni link to Romania.

Data published by Romanian gas transmission system operator Transgaz showed some volumes were entering Moldova through Iasi-Ungheni, with this gas used to maintain pressure in the system.

ENERGY CRISIS

Moldova has been at the centre of an energy crisis since the start of October with Russia’s Gazprom only expected to supply 67% of its demand, expected to be 90mcm this month, according to state-owned supplier Moldovagaz.

Gazprom has conditioned any increase in supply and the extension of a one-year contract on Moldovagaz paying a €709m debt, which has been accumulating over the last ten years, plus penalties.

With negotiations failing the Moldovan government declared a 30-day state of emergency on 22 October.

It tasked state buyer Energocom to buy 5mcm of gas from spot markets, with the first 1mcm set to come from PGNiG and ERU on 26 October.

A new tender was held the same day for gas to be delivered on 27 October and indexed to the ICIS TTF Day-ahead price assessment.

There are expectations Moldova will continue to buy spot volumes from Ukraine in the coming days because Ukrainian prices are at a discount to Romanian spot gas.

For example the Ukrainian November virtual trade point contract was assessed by ICIS at €84.35/MWh on 25 October, with the same product for delivery in Romania last trading on the BRM exchange at €89.85/MWh.