• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 3 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 5 hours Could Someone Give Me Insights on the Future of Renewable Energy?
  • 4 hours How Far Have We Really Gotten With Alternative Energy
  • 5 hours "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 2 days Bankruptcy in the Industry
  • 3 days The United States produced more crude oil than any nation, at any time.
Europe Still Addicted To Russian LNG

Europe Still Addicted To Russian LNG

The fact that neither pipeline…

Gas Glut? Not for Long.

Gas Glut? Not for Long.

Low prices invariably stimulate stronger…

Conflicts Could Put West Africa's Oil Supply At Risk

Conflicts Could Put West Africa's Oil Supply At Risk

Potential spillover of conflicts to…

Eurasianet

Eurasianet

Eurasianet is an independent news organization that covers news from and about the South Caucasus and Central Asia, providing on-the-ground reporting and critical perspectives on…

More Info

Premium Content

Southeast Europe's "Vertical Corridor" to Reshape Gas Transit

  • The "Vertical Corridor" utilizes existing pipelines in Southeast Europe, expanding capacity for gas transport and benefitting countries like Moldova and Ukraine.
  • The agreement aims to enhance energy security in the region, with potential implications for the Southern Gas Corridor and TAP pipeline.
  • Azerbaijan plans to increase gas production, with potential future imports from Turkmenistan and Iran to meet export targets.
Gas Pipelines

Countries in southeastern and central Europe have begun working together to create a new gas transit route to help compensate for the loss of Russian gas exports to Europe following Russia's invasion of Ukraine.

If realized, the "Vertical Corridor" would offer Azerbaijan a new route to export its gas to east and central European markets and, as such, could help Baku to meet its pledge to the European Union to double its gas exports to Europe to 20 billion cubic meters a year by 2027. 

The planned new route would mainly utilize existing pipelines connecting the gas transit systems of Greece, Bulgaria, Romania, Moldova and Ukraine but would require capacity expansion of some sections and of the cross-border connections. 

As such the "Vertical Corridor" would be able to provide valuable new sources of gas for Moldova and Ukraine, which since the Russian invasion have experienced problems meeting domestic demand.

No less significantly it would also be able to feed gas into Ukraine's existing major east-west gas transmission system which has been largely unused since Russia's invasion of that country in 2022 and the subsequent halting of gas transit to Europe.  

The project was kick-started at a January 19 meeting in Athens of energy ministers from southeastern and central Europe under the European Union's Central and South Eastern Europe Energy Connectivity initiative (CESEC).

The meeting, which was attended by EU energy Commissioner Kadri Simson saw the signing of a Memorandum of Understanding (MoU) between the gas transmission operators of EU member states Greece, Bulgaria, Romania, Hungary and Slovakia, as well as those of Ukraine and Moldova, aimed at creating a north-south gas transmission corridor between the seven states.

Commenting on the agreement Simson said that the vertical corridor will: "[E]nable bi-directional flows of natural gas from North to South and back," which would "help ensure energy supplies to Ukraine and Moldova and enhance the overall energy security of the region."

New corridor, old infrastructure

The new agreement proposes upgrading and expanding the existing gas transit infrastructure of the seven countries to create a new higher-capacity gas transit corridor which would reverse the direction of gas flow in some sections and allow larger volumes of gas to be transported from Greece and Turkey to Bulgaria, Romania, Moldova and Ukraine.

Ukraine's own existing transit pipelines could then carry the gas directly to Hungary, Slovakia and Poland, and on to other European markets further west.

The new corridor would be able to carry gas imported into Greece and Turkey by ship as Liquefied Natural Gas (LNG) and also gas from Azerbaijan imported through Turkey to Greece, 

The first step towards realizing the vertical corridor was taken on February 1 with Bulgaria's state-owned gas transit operator Bulgartransgaz EAD launching the EU-required public consultations for the capacity expansion, in parallel with the state operators of Greece, Romania, Moldova and Ukraine. 

The final capacity for the new corridor has yet to be decided, but according to Ukrainian state gas transit grid operator GTSOU, there is sufficient demand from European gas buyers for a capacity of as much as 21 million cubic meters a day through Moldova to Ukraine, That's double the existing capacity of the Southern Gas Corridor which currently carries all of Azerbaijan's gas exports to Europe. 

It remains to be seen what impact this will have on the existing Southern Gas Corridor, more specifically its final stage, the TAP pipeline. TAP is owned by a consortium that includes Azerbaijani state oil company SOCAR and BP, which operates Azerbaijan's biggest gas field, Shah Deniz, from which the bulk of Azerbaijan's gas exports are produced.

TAP has a nominal maximum capacity of 20 billion cubic meters a year but has been operating at around 10 billion cubic meters a year, pending a decision by the partners of the TAP consortium to make the necessary investment to add new compressors to allow the pipeline to carry more gas.

In January last year the consortium announced it would expand capacity by 1.2 billion cubic meters a year by 2026, but has yet to indicate when or if it will invest to boost capacity to the full 20 billion cubic meters a year. 

The creation of a new vertical corridor could make that extra expansion unnecessary - unless and until new sources of gas become available which could fill both corridors.

As it stands, the only sources of gas available are LNG - imported via terminals in Greece and Turkey, and gas transited by pipeline from Turkey, of which currently only gas from Azerbaijan is available. 

ADVERTISEMENT

Efforts to boost Azerbaijan's own gas production are well underway.

BP announced January 30 that it expects to begin production of gas from a new "deep" gas field early in 2024 while France's TotalEnergies, which last July began producing gas from Azerbaijan's Absheron gas field, has confirmed it plans to boost production from 1.5 billion cubic meters a year to around 5.5 billion cubic meters a year.

Baku continues to claim that it is on target to meet its promise to deliver 20 billion cubic meters a year to Europe by 2027, but doubts remain as to whether it can meet that target without imports from its neighbors, Turkmenistan and Iran.

Gas from Turkmenistan could become available for either or both corridors if negotiations between Turkey, Turkmenistan and Iran to deliver Turkmen gas to Turkey via Iran bear fruit.

By David O’Byrne via Eurasianet.org

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News