Gazprom signs direct energy contract with PMR, bypassing Moldova

Gazprom, the third largest company in the world (shown), now signs its energy contracts directly with Tiraspol, not Moldova

MOSCOW (Tiraspol Times) - Whatever happens to Moldova with regards to the "energy weapon" of gas supplies from Russia, it will not affect Pridnestrovie. That is the results of a direct contract between Moscow and Tiraspol, bypassing Moldova and not related in any way to the separate contract between Moscow and Chisinau, the capital of Moldova.

As reported by RBC, Pridnestrovie - also known as Transnistria - will sign a contract on gas deliveries directly with Gazprom. According to the CEO of the joint Russian-Moldovan venture Moldovagaz, Gennady Abashkin, it is expected that Moldovagaz's formal subsidiary Tiraspoltransgas will sign a gas contract with Gazprom, while the previous contracts were signed between Gazprom and Moldovagaz.

Tiraspoltransgas has announced that it will leave Moldovagaz and transfer its shares and assets to Gazprom, followed by the creation of a joint venture on the basis of Tiraspoltransgas. This is one more step aimed at severing links with neighboring Moldova, on the other side of the Dniester river. With trade between the two sides now at a minuscule 1% of the total, the process of disentanglement from Moldova is as good as completed.

According to officials in Tiraspol, the capital of Pridnestrovie, the new and emerging country is undertaking what expects will be a "velvet divorce" with Moldova. The term is a reference to the the dissolution of Czechoslovakia, which split the former Soviet-block country of Czechoslovakia into the nations of the Czech Republic and Slovakia, effective January 1, 1993.

In Pridnestrovie's case, it was together with Moldova in a Soviet Union construct known as the Moldavian SSR (also known as MSSR), a Soviet Socialist Republic. In the dissolution of the Soviet Union, Pridnestrovie declared its independence from the MSSR in 1990, and Moldova followed suit one year later, in 1991. Although Pridnestrovie accepted Moldova's independence claim, Moldova has never accepted Pridnestrovie's and still maintains a territorial claim on its former MSSR partner, despite nearly seventeen years since the two split.

Moldova's old territorial claim is based on what it sees as the "territorial integrity" of the former MSSR, a claim which some legal experts dispute.

" - The crux is that the MSSR was never a sovereign country. Therefore, it has no claim to "territorial integrity" under the Helsinki Convention. That convention applied to the signatories," says William Wood, an international lawyer and former UN staffer.
" - If we have to be strict about it, it was Moldova which broke the Helsinki Convention's territorial integrity clause by its August 1991 declaration of independence. At that time, the Soviet Union was still very much alive and would have a valid claim under the convention to not have its territorial integrity smashed by the someone claiming to all of a sudden be the self-declared Republic of Moldova. It is a bit rich to hear Moldova mouth off about territorial integrity when, A, they never had that right under Helsinki, and, B, in their own state creation process, they infringed on the territorial integrity of one of the signatories to that convention."

International sovereign state

Now, with Gazprom signing a deal directly with Tiraspol, it recognizes that Pridnestrovie is an sovereign legal entity in the international system which can conclude its own contracts independently of Moldova.

Pridnestrovie declared independence in 1990, one year before the state creation of the Republic of Moldova. Although lacking in international recognition, the new country meets all the requirements for statehood under international law. It has sovereign control over a territory with defined borders, it has a permanent population which exceeds that of many U.N. members, and it has a representative government which engages in relations at the international level and represents its population domestically as well as abroad.

Gazprom is the largest Russian company and the biggest extractor of natural gas in the world. Gazprom supplies almost all the gas needs of Central Europe, Eastern Europe, and the former Soviet Union. With sales of US$ 31 billion in 2004, it accounted for about 93% of Russian natural gas production. With 119 billion barrels of reserves, Gazprom only ranks behind Saudi Arabia and Iran as the world's biggest owner of oil and oil equivalent in natural gas. Apart from its gas reserves and the world's longest pipeline network with 150,000 km, it also controls assets in banking, insurance, media, construction and agriculture. With a market capitalization of US$ 271 billion, Gazprom is the third largest corporation in the world.

Apart from its energy business, it is also active in Pridnestrovie through its ownership of Gazprombank, one of PMR's largest consumer banks with branches in Tiraspol, Bender and other parts of the country. Oleg Smirnov, son of Pridnestrovie's president Igor Smirnov, was until recently the CEO of Gazprombank's Pridnestrovie-based operations. (With info from RBC)

See also:
» 100% gas network coverage of Dubossary, but debt continues to mount

On the web:
» Gazprombank (Pridnestrovie), official site