The Vertical Gas Corridor is developing from an emergency response to disruptions in Russian gas transit into a permanent north-south energy infrastructure network. The initiative now links transmission system operators from nine countries: Greece, Bulgaria, Romania, Moldova, Ukraine, North Macedonia, Serbia, Hungary and Slovakia.
The expansion aligns with a wider shift in Southeast Europe’s gas strategy. Rather than focusing only on replacing disrupted supply sources, countries are aiming to build a more flexible regional system. This system is intended to move gas between LNG terminals, storage facilities and national markets over the longer term. The stated objectives include strengthening security of supply, improving market connectivity and reducing dependence on individual suppliers.
European storage levels and short-term price signals
The corridor’s development is taking place as European gas markets face tighter conditions. EU storage facilities were reported at 54% capacity on 19 July, down from 64.8% during the same period a year earlier. Working inventories were approximately 59 billion cubic metres, about 11 bcm below 2025 levels.
Market structure also affected storage economics. When short-term gas prices traded above winter contracts, incentives for storage injections weakened. Governments and utilities faced a choice between securing additional volumes at higher prices or accepting greater exposure ahead of the winter heating season.
Southeast European pricing reflected the same pressure. Average CEGH gas prices reached €60.65/MWh in the second half of July, while Greek gas prices averaged €48.61/MWh. Serbia reported that European gas prices rose by almost 30% since April to around €65/MWh, while regulated household prices remained unchanged and the country continued relying on its oil-indexed Russian gas agreement.
Regional infrastructure updates and integration work
Diversification efforts are progressing across the region alongside corridor expansion. Croatia’s Krk LNG terminal is expected to increase annual capacity by approximately 1 bcm in 2027, expanding access to imported liquefied natural gas. Croatia and Hungary are also working on additional cross-border transmission capacity.
Vertical Gas Corridor partners are continuing assessments focused on technical and regulatory requirements for stronger integration with Serbia and North Macedonia. Serbia is advancing measures aimed at improving supply security, including a planned gas interconnection with Romania. Serbia is also increasing storage availability via leased capacity in Hungary.
The Banatski Dvor storage facility was reported at around 93% full, holding approximately 482 million cubic metres. Future upgrades are expected to raise withdrawal capacity to 12 million cubic metres per day.
Market use requirements for new pipeline capacity
The corridor’s effectiveness depends on both physical infrastructure and market utilisation. New pipelines can become costly security assets if long-term capacity bookings remain insufficient. Limited reverse-flow capability, complex tariff structures or poorly coordinated capacity products could also reduce the practical value of new connections.
The commercial performance of the corridor is therefore linked to deeper regional market integration. This includes harmonised capacity auctions, transparent congestion management, competitive cross-border tariffs and equal access to LNG and storage infrastructure.
Diversification steps in Bosnia and Herzegovina
For Bosnia and Herzegovina, diversification remains a priority within the regional context described for Southeast Europe’s gas system. Gazprom Export increased the third-quarter gas price paid by Energoinvest by 14.42%, reaching approximately €0.50 per cubic metre. Republika Srpska has allocated €48.5 million for the Šepak–Novi Grad gas pipeline.
Discussions continue regarding southern interconnection routes and the potential role of LNG supplies delivered through Croatia. The source data also notes that diversification projects can involve political, financial and regulatory challenges. It adds that continued dependence on a single supplier leaves consumers and industry exposed to external pricing decisions and supply risks.
Gas demand outlook and infrastructure flexibility considerations
The role of natural gas is expected to continue as coal-fired generation declines and renewable energy sources expand across Southeast Europe’s energy system. Future infrastructure investments are expected to account for long-term changes in gas demand and stricter methane regulations. The possibility of adapting selected assets for hydrogen and renewable gases is also part of the planning considerations described.
The material states that projects offering immediate improvements in supply security while remaining flexible in a lower-carbon energy market are considered most valuable within this framework. It further links the long-term success of the Vertical Gas Corridor to creating an integrated regional gas market capable of supporting Southeast Europe’s broader energy transition.
