Gas trading liquidity on Moldova's BRM Est platform will "certainly increase" but it is likely to be a slow process, BRM Moldova country manager Ion Lupulescu told Argus.
One of the main issues inhibiting stronger participation from international companies is the need for them to set up a local legal entity, which entails "considerable operational costs", Lupulescu said. This is an unnecessary condition that "complicates the process and prevents the formation of liquidity in the wholesale market", he said.
The lack of fully-enacted balancing market laws is another key limiting factor for liquidity, according to Lupulescu. Moldovan transmission system operator (TSO) Vestmoldtransgaz has proposed some provisional balancing rules but many aspects are still yet to be resolved, Lupulescu said. BRM proposed that the balancing platforms used in Romania should be offered to the Moldovan TSO free of charge, but Vestmoldtransgaz is yet to make a decision on this. The use of BRM's balancing platform would simplify the process by allowing the TSO and market participants to sell and buy the required quantities in real time, according to Lupulescu.
Balancing in Moldova is done at the end of the month rather than each day at present, in a "very rudimentary procedure" without a balancing platform that is open to network users, Lupescu said. This process is influenced by the working method agreed by Vestmoldtansgaz with TiraspolTransgaz, the TSO from Transnistria, he added. Full balancing legislation is scheduled to be implemented in August 2025.
The provision of clearing services is also on the agenda, with these services often being seen by trading firms as critical to ensuring the viability of trading, particularly in relatively small and illiquid markets. BRM has its own clearing service in Romania but is unable to provide this to its Moldovan subsidiary because there is no Moldovan legislation to enable it, Lupulescu said. BRM plans to offer these services first on the spot market and then as soon as possible on the term market, but this will only happen when the government enables it, potentially in the second half of 2025, he said.
Despite these difficulties, there are some positive signs for BRM Est liquidity for the future, notably the obligation for large companies to procure their gas on the free market from the start of 2025. This will drive the development of the retail gas market in Moldova, although liquidity will only increase if there are "more active traders on the wholesale market", Lupulescu said.
Lupulescu expects Moldovan consumption to increase in the coming years, but said this will depend on investments from industrial users, economic development and energy efficiency measures, among other factors.
Once Moldovan legislation aligns with EU laws, BRM hopes to start offering further services for products such as green gases and guarantees of origin, if there is market demand.
The first spot transaction was carried out on BRM Est's platform on 30 September and the country's largest supplier Moldovagaz completed its first spot transactions last week. Liquidity has increased over the past five days, with around 20 GWh/d traded by companies buying gas on BRM in Romania and then trading this gas on BRM Est's spot market, Lupulescu said. Prices averaged around €39.70/MWh, he said — lower than Argus' assessment of the TTF day-ahead market which averaged €41.01/MWh on 21-24 October.
