Southeast Europe is witnessing a significant transformation in its gas market, driven by the increasing prominence of liquefied natural gas (LNG). Once regarded as a marginal option for diversification, LNG is now emerging as a crucial element for price-setting and system balancing across the region, reshaping supply routes and infrastructure priorities from the Adriatic to the Black Sea.
The evolving market structure is characterized by a dual-entry system centered around two primary corridors. Greece has established itself as the main LNG gateway and trading hub in the south, while Croatia’s Krk terminal serves as a vital entry point for Central Europe and parts of the Western Balkans. The critical challenge lies in inland transmission capacity, particularly through Bulgaria and Romania, which dictates the movement of LNG from coastal terminals to continental demand centers.
Greece has become a pivotal player in this transformation. The country is no longer merely importing LNG for domestic consumption; it is increasingly functioning as a regional redistribution hub, exporting gas northward into Bulgaria and beyond. In 2023, LNG imports into Greece reached approximately 29.95 TWh, accounting for 38% of total gas supply. Total gas demand, including exports, rose to 78.75 TWh, marking a 14% year-on-year increase. This shift illustrates Greece’s transition from an endpoint market to a key transit and trading node.
This change is supported by significant infrastructure developments. The Revithoussa LNG terminal remains central to Greek gas imports, while the recently operational Alexandroupolis Floating Storage Regasification Unit (FSRU) enhances regasification capacity with an output of 136.2 GWh/day. Long-term contracts have secured this capacity for various domestic and international players, ensuring its utilization well into the next decade.
The commercial landscape surrounding this infrastructure is also evolving. Companies such as DEPA, Metlen, PPC, Heron, and Shell are building LNG portfolios that extend beyond Greece’s borders. Notably, long-term negotiations include proposed agreements for U.S. LNG volumes of up to 15 bcm annually over 20 years, aimed at serving not just Greece but a broader corridor through the Balkans toward Central Europe.
Meanwhile, Croatia’s Krk LNG terminal plays a crucial role in the northern Adriatic corridor. Its capacity expansion from 3.9 bcm to 6.1 bcm per year has positioned it as a primary supply source for Croatia and neighboring countries. Over 60% of gas entering Croatia’s transmission system now originates from Krk, marking a significant shift away from historical reliance on pipeline supplies.
Krk’s strategic importance is underscored by its connectivity to various buyers such as PPD, MVM, MET, INA, HEP, and Geoplin, linking LNG supplies to demand centers in Slovenia and Hungary. The terminal’s capacity is largely booked, confirming its status as a stable entry point rather than an asset subject to fluctuations.
The United States has become a dominant supplier across both corridors. Since 2021, more than two-thirds of LNG cargoes entering Croatia have originated from U.S. export terminals; in Greece, this figure exceeds 86%. This trend highlights the scale of U.S. liquefaction capacity and its flexible commercial model that allows cargo redirection based on market signals.
This integration into global LNG market dynamics represents a fundamental shift for Southeast Europe. The region is now more susceptible to global price volatility rather than being solely influenced by pipeline geopolitics.
However, challenges remain regarding inland transportation capabilities. The ability to transport LNG-derived gas from Greece or Croatia into Southeast and Central Europe heavily relies on interconnection capacity through Bulgaria. The Vertical Gas Corridor—linking Greece with Bulgaria and Romania—is becoming essential for facilitating this flow.
Infrastructure upgrades along this corridor are anticipated to be completed by 2026, with expanded capacities allocated through annual auctions. For LNG to compete effectively with traditional pipeline supplies, it must be able to move northward at scale; otherwise, it risks being confined to coastal markets.
For Serbia, these developments are particularly significant as it continues to rely on pipeline gas delivered via TurkStream. However, diversification efforts are underway with the Bulgaria-Serbia interconnector providing access to LNG-linked gas from Greece at a capacity of 1.8 bcm per year. Serbia has reserved 300 million cubic meters per year at Alexandroupolis over a decade-long period, indicating a strategic shift towards diversifying its energy portfolio.
The economic landscape remains complex; LNG-derived gas must compete with Russian pipeline supplies that often retain cost advantages when transportation and regasification expenses are considered. Serbia’s strategy appears focused on maintaining optionality—ensuring multiple supply routes are available to manage price risks effectively.
In North Macedonia, progress towards greater integration is evident with an interconnector project with Greece currently under construction and expected to be completed within two years. This will provide direct access to LNG infrastructure for the first time.
Conversely, Montenegro remains outside the operational LNG framework despite discussions around potential import infrastructure and gas-fired generation projects in the Bar region; no initiatives have yet reached execution status.
Turkey also plays an influential role in this landscape despite not being part of the Western Balkans market structure; it operates as a parallel gas hub with regasification capacity of approximately 150 million cubic meters per day and numerous long-term contracts with global suppliers that can affect regional supply dynamics.
The future of Southeast Europe’s LNG market will hinge on how global supply interacts with regional constraints by 2026. While new infrastructure offers diversified entry points and suppliers are increasing in number, exposure to global price shocks is also rising due to recent disruptions affecting major exporters like Qatar.
The outcome is likely to be a hybrid system where Southeast Europe becomes more resilient through multiple supply routes while simultaneously integrating deeper into an inherently volatile global LNG market.
In this changing environment, flexibility will be paramount—accessing terminal capacities and cross-border transmission rights will be crucial for success as Greece positions itself as a trading hub while Croatia serves as the northern gateway and Bulgaria acts as an essential transit corridor.
The ongoing transformation indicates that LNG is solidifying its role not merely as an alternative but increasingly as a fundamental component of Southeast Europe’s energy architecture shaping future flows and pricing mechanisms well into the next decade.
