Regional efforts in Southeast Europe: confronting dependence on Russian gas

Southeast Europe continues to grapple with a significant reliance on Russian natural gas, a dependency that exposes regional vulnerabilities amid geopolitical tensions and market fluctuations.

Greece, in particular, remains heavily influenced by this dynamic, with estimates indicating that over half of its imported gas supplies originate from Russia – primarily via indirect routes – highlighting the critical need for diversification.

Greek shipping magnate Yannis Vardinoyannis, owner of Motor Oil, has publicly criticized the Greece-Bulgaria Interconnector (ICGB), asserting that it primarily benefits Bulgaria, leaving Greek consumers underserved. He argues that this arrangement conflicts with Greece’s national interests, especially as the country seeks to diversify its energy sources.

Notably, at the Komotini connection point of the Greece-Bulgaria Interconnector (IGB), there is no entry point to the Greek national network, which significantly limits its commercial potential within Greece. Although the IGB boasts a technical capacity of 106 gigawatts per day, it currently operates at only about a third of its capacity.

Despite official claims of diversification, Greece’s natural gas imports from Russia continue to exceed 50%, underscoring the persistence of reliance on Russian supplies. This situation is compounded by Greece’s decision to abstain from participating in the Turkish Stream pipeline – Russia’s major export route to Europe – thereby increasing costs and reliance on intermediary suppliers.

Strategic infrastructure and regional initiatives

The underutilization of the IGB pipeline remains a concern for Greek stakeholders. Gastrade, operator of Greece’s LNG terminal, has emphasized the importance of activating reverse flow capabilities- enabling gas imports from Bulgaria and neighboring regions – as a critical step toward regional energy diversification.

Operational since October 2022, the 182-kilometer IGB pipeline has become a cornerstone of Greece’s regional energy strategy. With an initial capacity of 3 billion cubic meters (bcm) annually – expandable to 5 bcm – it connects Greece’s gas network with Bulgaria and grants access to the Southern Gas Corridor, which supplies Azerbaijani gas. Managed by ICGB AD – a joint venture among Bulgaria, Greece, and Italy – the pipeline plays a pivotal role in regional energy security and diversification efforts.

Greece’ Vertical Gas Corridor plan aims to reverse traditional pipeline flows. This ambitious project envisions channeling gas from Greek terminals in Revithoussa and Alexandroupoli through Bulgaria into Romania, Hungary, Slovakia, Moldova, and Ukraine- potentially transporting 20-25 bcm annually. Such a network would reinforce Greece’s role as a regional energy hub and elevate its geopolitical standing.

Complementing these infrastructure projects is Greece’s LNG terminal in Alexandroupoli, partially funded by the European Commission. The floating storage and regasification unit (FSRU) aims to reduce Southeast Europe’s dependence on Russian gas and position Greece as a key transit hub for the Balkans and beyond. This strategic move signals Greece’s ambition to become a regional energy gateway.

Despite these advancements, utilization challenges persist. Greece currently relies on the Trans Adriatic Pipeline (TAP) for gas imports, which entails higher costs and less flexibility.

Bulgaria is also making efforts. In June, 2024q Bulgaria has initiated the implementation of the Vertical Gas Corridor, signing contracts with notable international companies—including HILL International, Honeywell, Emerson, and CRC Evans—to expand capacities of key connections with Greece and Romania. This expansion aims to support the delivery of diverse gas sources, including liquefied natural gas (LNG), especially in light of the upcoming suspension of Russian gas transit through Ukraine from 1 January, 2025. These enhancements will facilitate the flow of gas from the Southern Gas Corridor and LNG imports, reducing reliance on Russian pipelines.

Meanwhile, Russia’s TurkStream pipeline, capable of transporting 31.5 bcm annually, remains Russia’s primary export route to Europe following Ukraine transit disruptions. Bulgaria invested nearly 3 billion leva in TurkStream.

EU’s position

On 6 May, the European Commission announced a comprehensive plan to phase out all imports of Russian gas and oil by the end of 2027, a landmark move to sever energy ties with Moscow in response to Russia’s 2022 invasion of Ukraine.

EU to end all Russian gas and oil imports by 2027, signals robust energy sanctions

But within the EU, member states are divided on the best strategies to reduce reliance on Russian energy. Countries like France and Belgium advocate for alternative supply strategies and cautious engagement, seeking reassurances before fully supporting a ban on Russian gas contracts. Conversely, Spain and the Netherlands are championing a complete phase-out of Russian energy dependence.

The EU’s REPowerEU plan, launched in response to the Ukraine conflict, emphasizes energy conservation, diversification through increased LNG imports, and accelerated renewable energy deployment. Its overarching goal: reduce dependency on Russian gas, bolster energy resilience, and ensure economic stability. Since May 2022, the EU has cut Russian gas imports from 45% to 19%, though recent increases in 2024 underscore the ongoing challenge of achieving complete independence.

Strengthening regional cooperation, accelerating diversification initiatives, and aligning with broader EU objectives are essential steps toward ensuring energy security and enhancing Europe’s collective resilience.

Caption: A photo taken by drone shows the transshipment procedures of the first cargo of liquefied natural gas (LNG) at the Floating Terminal in Alexandroupolis, northern Greece, 21 February 2024. [EPA/DIMITRIS ALEXOUDIS]