The planned Vertical Gas Corridor, connecting Greece to Ukraine, continues to face challenges in attracting sufficient commercial interest, despite ongoing efforts to improve its competitiveness through revised tariffs and more flexible transport conditions. The main concern ahead of the next major capacity auction in July remains the limited appetite for long-term gas bookings among market participants.
Although market conditions in Central and Southeastern Europe have improved compared with earlier unsuccessful auctions, companies remain cautious about locking in additional supply commitments. Traders and utilities point out that Russian gas continues to flow into regional markets, while ongoing uncertainty regarding future European restrictions discourages longer-term contracting strategies.
Ukraine, initially expected to be the primary destination for US LNG transported via the corridor, is currently facing a less severe supply situation than in the previous year. Domestic production now covers most of its consumption needs, leaving only a shortfall of around 2 billion cubic meters, which is already being met through existing import routes from Poland and Germany.
As a result, analysts expect Ukraine’s participation in the upcoming capacity auction to remain relatively limited, which will likely force corridor operators to look toward alternative regional demand centers to support utilization and growth.
The updated operational framework for the corridor now enables gas to enter and exit at multiple points along the route, potentially expanding access to additional markets across the region. However, trading activity remains subdued, as many buyers continue to rely on existing supply contracts, spot LNG cargoes, and Russian pipeline gas rather than committing to long-term transport capacity.
At present, the Vertical Gas Corridor is ranked as the third most competitive option among seven available gas supply routes into Ukraine.
Energy regulators are expected to finalize approval of the revised tariff structure in the coming weeks, with official announcements anticipated ahead of the July capacity auction.
Experts emphasize that the long-term viability of the corridor will largely depend on Europe’s future stance on Russian gas imports. In a scenario where Russian supplies are fully phased out, Europe could face an annual supply gap of approximately 18 to 20 billion cubic meters, potentially creating a significant opportunity for the Vertical Gas Corridor to supply up to 4 billion cubic meters of gas competitively into the broader regional market.
