From the infrastructure to operational integration, with US backing and the goal of European energy security via LNG and Balkan cross-border flows.
At a time of intense geopolitical upheaval and rearrangement of energy flows in Europe, the Vertical Gas Corridor is emerging as a key project of strategic importance that can redefine the South-North supply map. With the key infrastructure already well advanced, the focus is now shifting from construction to operational maturity and the creation of a single regulatory and commercial framework that will allow the full realisation of the system’s capacity. The prospect of enhancing LNG flows liquefied natural gas, cross-border cooperation and the involvement of strong international players make up a complex but crucial puzzle, where Greece is acquiring a central role as an energy hub in South-Eastern Europe.
The Vertical Gas Corridor project is at a critical stage of maturity. According to iefimerida.gr, the hardware, i.e. the physical infrastructure, has been largely completed.
Transparent regulatory framework
The software required to make the most of the hardware remains to be further developed: a single, stable and transparent regulatory framework, interoperability, competitive transit tariffs and financing remain challenges to be addressed before the South-North route can unleash its potential. An important element in the whole equation is the unwavering US support for the project, as Washington sees the Vertical Corridor as a critical piece of the new geoenergy “puzzle” that will facilitate the flow of US LNG to Central and Southeastern Europe and the Western Balkans.
The above were reflected in the interventions of US Department of Energy Special Envoy Joshua Volz, Deputy Minister of Environment and Energy Nikos Tsafos, Secretary General of Energy and Mineral Resources Despina Paliarouta and DESFA CEO Maria Sferoutsa, at the Balkan Energy Summit in Athens.
Volz: “First mile in a marathon” for the Balkans
The global energy system is being “reprogrammed” under the weight of the wars in Ukraine and Iran, Joshua Volz noted. New infrastructure is being built, old infrastructure is being upgraded, and the Vertical Corridor, he said, represents a “strategic geopolitical opportunity that turns the Balkans into a critical hub of European energy security.”
The numbers, however, highlight the “gap” that needs to be closed. The capacity of the Vertical Corridor from south to north currently stands at 9 billion cubic metres per year (bcm). The gap that would result from the complete elimination of Russian gas is estimated at 24 bcm. Therefore, both further capacity enhancement – including expansion to the Western Balkans – and diversification of routes are needed to create real competition for the benefit of consumers.
“We are not yet ready for the victory lap. We are going the first mile in a long marathon, but the direction is clear,” the U.S. official made clear.
On expansion to the Western Balkans, Volz said that the leaders of these countries – outside the EU – are showing greater pragmatism and flexibility. “The term Balkanisation comes from this region of the world and fragmentation is a real thing. Collective action is a prerequisite to engage the private sector more broadly.”
Chef: the “operating system” will plug the Corridor.
“We have completed most of the hardware. Now we need the software, the operating system that will make full use of the infrastructure,” Deputy Minister Nikos Chafos said. This translates into a single regulatory framework – across national borders – and truly competitive products.
He added that it is still too early to evaluate the project, as the key condition to “unlock” its benefits – the complete elimination of Russian gas – has not yet been achieved. The bulk of the bans (on long-term contracts for conductive gas and Russian LNG) are triggered in the coming months, with a completion horizon of the end of 2027.
Paliaruta: Focus on long-term contracts
Despina Paliaruta emphasized the interoperability of infrastructure along the Corridor and the growth of two-way flows. As immediate priorities she highlighted:
– The implementation of the March agreement between the TSOs and Regulatory Authorities of the countries involved (Greece, Bulgaria, Romania, Moldova, Ukraine) and the Commission, on the alignment of the regulatory framework and transit charges.
– The conclusion of long-term LNG supply contracts to make the project attractive for private investors – especially as EU financial support is facing obstacles.
“We need to make the overall environment stable and attractive for investors,” he stressed, noting that “in a period of geopolitical uncertainty, accelerating strategic projects, regulatory stability and cross-border cooperation are crucial for a secure and resilient European market.”
Sferoutsa (DESFA): at 8 bcm Greek export capacity by the end of 2026
DESFA CEO Maria Sferoutsa focused on the rapid developments in Greek infrastructure and especially the rapid increase in export capacity from 2 bcm to 8 bcm by the end of 2026
. cubic meters (bcm) per year in 2022 to 4 bcm today and 8 bcm at the end of the year, when the Compression Stations in Abelia and Komotini will be fully operational.
Next steps include the Greece-West Macedonia interconnector pipeline due to come on stream in 2027 that will add another 1 bcm to Greece’s export “firepower”, the Nea Mesimvria Compression Station (which will allow two-way flows from TAP) and the Karperi-Komotini pipeline that will increase gas flows from Eastern to Western Greece.
“Setting up the hardware can be time-consuming, but it is relatively easy. The hard part is the software that will support its operation,” she said. “Export capacity is one thing. Diversification of gas sources through interconnection of exit and entry points is another thing altogether. We need to develop national gas systems that ‘communicate’ with all their neighbouring systems. This enhances competitiveness at national and regional level,” concluded the DESFA CEO.
