EditUkrainian gas storage and Trans-Balkan Pipeline could transform Europe’s energy security
The creation of a dedicated joint venture — involving Bulgaria, Romania, Moldova, and Ukraine — could transform the Trans-Balkan route into an efficient and cost-effective corridor, writes Sergiy Makogon.
Sergiy Makogon is Senior Energy Expert, former CEO of Gas TSO of Ukraine (2019-2022).
Ukraine’s gas storage facilities — the largest in Europe — hold untapped potential in strengthening the continent’s energy security. Built during the Soviet era near Europe’s borders, they were designed to quickly respond to spikes in demand and help stabilize gas systems across the region. With a maximum withdrawal capacity of 250 million cubic meters (mcm) per day, these storages have historically played a vital role in balancing supply and demand.
As Russian gas transit through Ukraine has declined, the use of these facilities has also fallen. Yet, when market conditions are favorable, they remain in demand. In 2020–2021, Western traders stored around 12 billion cubic meters (bcm) of gas in Ukraine — proof of the infrastructure’s relevance.
The growing reliance on LNG in Europe’s gas mix is creating new demand for flexible storage solutions. Ukrainian storage facilities are well-positioned to meet this need, offering strategic reserves that can enhance supply security and market stability.
The European Commission (EC) is actively exploring ways to integrate Ukrainian storage more deeply into the EU gas market. Recent reports suggest that the EC is considering using Ukrainian storage to facilitate flows to Slovakia — not with Russian gas, but with non-Russian volumes imported via LNG terminals in Greece and Turkey. Under this scenario, as much as 10 bcm of gas could be transported to Ukraine through the Trans-Balkan pipeline and later routed via Slovak infrastructure to EU markets during peak winter demand. Some within the Commission believe this could reestablish Slovakia’s role as a transit hub while advancing REPowerEU goals to eliminate Russian gas from European markets.
Technically, this vision is feasible. With targeted upgrades to compressor stations in Bulgaria, the Trans-Balkan pipeline could deliver the required volumes. But the major obstacle is economic — uncoordinated tariff policies across the involved countries result in prohibitively high transit costs from southern LNG terminals to Ukraine. Without competitive pricing, traders are unlikely to embrace this route.
A potential solution lies in structural reform. The creation of a dedicated joint venture — involving Bulgaria, Romania, Moldova, and Ukraine — could transform the Trans-Balkan route into an efficient and cost-effective corridor. Historically, this pipeline was exclusively a conduit for Russian gas, bypassing national transmission systems. For instance, three Trans-Balkan lines cross Romania, yet only one (T1) was connected to the Romanian national grid as recently as 2020–2021. By segregating these transit pipelines from domestic systems and pooling them into a joint venture, the participating countries could offer streamlined operations, lower maintenance costs, and a unified, competitive tariff structure.
This joint venture should establish a single transit tariff for the route from Bulgaria to Ukraine’s Orlovka entry point. With an asset base limited to the transit pipelines themselves, tariffs could be 5–10 times lower than current rates, reflecting leaner operations unburdened by national grid overhead.
Such a setup would make transportation from Greece and Turkey to Ukraine both economically viable and attractive for market participants. The benefits would be shared across the region: Greece and Turkey would maximize the use of their LNG terminals, while Bulgaria, Romania, and Moldova would monetize currently idle infrastructure and offset maintenance costs.
Of course, the Trans-Balkan corridor is not the only option under discussion. Competing routes, such as the Solidarity Ring and the Vertical Corridor, could offer similar capacities for transporting gas from Southern Europe to Slovakia and Hungary. However, these new projects would require major capital investments in pipelines and compressor stations — investments that would ultimately translate into higher tariffs for shippers. In contrast, leveraging the existing Trans-Balkan infrastructure would require minimal additional investment and could deliver a low-cost, flexible solution for Europe’s evolving gas market needs.
If carefully structured, this corridor could help reshape Europe’s energy map — turning Ukrainian storage and the Trans-Balkan pipeline into critical assets for the continent’s energy resilience in the years ahead.
Updated: April 28, 2025 - 04:52
