Plans to enhance gas transportation from southern Europe to Ukraine are facing renewed challenges, as upcoming capacity auctions for the Vertical Gas Corridor may see a lack of bidders. This situation mirrors the disappointing outcomes of previous auctions, raising concerns about the project’s commercial feasibility.
Experts cite a combination of unresolved regulatory issues, inconsistent signals from the European Commission, and a lack of long-term clarity for investors as key factors undermining market confidence. Although the corridor is positioned as a vital route for transporting US liquefied natural gas (LNG) northward, significant structural and regulatory hurdles remain unaddressed.
The European Commission’s position is central to the ongoing deadlock. While the corridor is recognized for its geopolitical significance, officials are questioning whether the capacity products proposed by transmission system operators in Greece, Bulgaria, Romania, Moldova, and Ukraine comply with EU market regulations. There are indications that external diplomatic efforts, potentially involving the United States, may be necessary to facilitate progress.
Uncertainty surrounds three specific capacity products along the corridor. The first allows gas deliveries to Ukraine via the Revythoussa LNG terminal and the Alexandroupoli floating storage and regasification unit. The second focuses on LNG volumes entering through Alexandroupoli and moving into Bulgaria via the IGB interconnector. The third connects the Trans-Adriatic Pipeline in Komotini with the IGB, enabling flows that also incorporate gas from Azerbaijan.
Officials have pointed out a growing contradiction within EU energy policy. Last year, the Commission committed to substantial purchases of US energy in the coming decade; however, its current regulatory indecision is hindering infrastructure development essential for facilitating those imports to eastern and northern Europe.
The gravity of the situation was highlighted in December when expanded capacity products were introduced but failed to attract any demand. Market participants reportedly withdrew their interest after late-stage regulatory uncertainties emerged, particularly regarding whether shippers could reserve capacity across the entire corridor—from Revythoussa to Ukraine—under a single unified product. This lack of clarity continues to undermine confidence ahead of future auctions.
