Today’s annual auction marks the official restart of the Vertical Natural Gas Corridor, the first under the new framework of reduced tariffs and long-term contracts agreed upon months ago with the European Commission, and which serves as a crash test to gauge how competitive it has become compared to other routes.
The outcome will be determined not only by the now very low transit costs on the Greece-Ukraine route—which, following the “cut” on the Romanian section have dropped to 5.85 euros/MWh and are considered among the lowest in Europe—but mainly by the demand expressed by both Kyiv, to meet its needs for the coming winter, and other countries.
Moreover, the new system now allows traders to secure capacity at all cross-border points in the countries located between the starting point—Greece—and the destination—Ukraine.
“Our route to Ukraine is now considered the third cheapest in Europe, but Kyiv is not the only target market. For the Greek side, an increase in exports in general should be considered a success,” comment officials familiar with the process.
In any case, beyond the certain participation of Bulgargaz and DEPA—as recently stated by DEPA’s head, Konstantinos Xifaras— success will depend on the quantities of the auctioned capacity (around 100 GWh) that are secured, as well as on whether new players—beyond those already known—can be attracted.
According to estimates from DESFA sources as well as a statement made weeks ago by Atlantic SEE itself (60% AKTOR, 40% DEPA), the allocation of the auctioned capacity through the Sidirokastro gateway is expected to range between 30% and 50%, with potential customers from Bulgaria, Romania, and Ukraine.
If these estimates prove accurate, we are looking at commitments of between 30 and 50 GWh—a figure that, while not considered particularly large, should not be overlooked, as market analysts point out.
Competition among routes
First, this year’s period is viewed as a preparatory phase ahead of the 2027–2028 gas year, when the region’s transition away from Russian natural gas supplies will be completed.
Second, the scope of competition is enormous, regardless of the improvements made to make the Vertical Corridor more attractive to traders and buyers.
This is evidenced by the fact that the annual auctions currently held across Europe—from south to north and from west to east—are quite numerous, as ICIS reporter Aura Sabadus details in her analytical note.
This includes those involving the Denmark–Poland, Lithuania–Poland, Germany–Poland, and Germany–Czech Republic, as well as those in our own neighborhood—namely between Croatia and Hungary, Greece and Bulgaria—and via TurkStream, that is, the Turkey/Russia–Bulgaria route.
In fact, since March—when the operators of the Vertical Corridor countries agreed with the European Commission on a more attractive framework—the project has ceased to operate under a special regime, as an exception to the EU framework.
It is no longer a special case—as it was initially, to meet Ukraine’s needs last winter—but has been fully integrated into the European system, where countless LNG transport routes compete with one another to see which will prove the cheapest and most attractive to gas traders and buyers.
The TurkStream Factor
A third factor of interest concerns the response to volume commitments via TurkStream. Although the phased ban on Russian gas flows is underway, companies that have long-term contracts in place with Gazprom—and there are quite a few in our region—can still secure capacity on TurkStream as usual. After all, the definitive ban on Russian gas flows to the EU takes effect on September 30, 2027.
And as the latest report from the European Agency for the Cooperation of Energy Regulators (ACER) shows, Russian gas remains resilient. In the first five months of 2026, pipeline imports of Russian gas rose by 7% year-over-year, while imports of Russian LNG increased by 11%.
Competition on Tariffs
The above illustrates why today’s auction on the Vertical Corridor—that is, the South-North axis—is significant for symbolic reasons as well. At the same time, the extent of participation will also reveal the impact of the significant reduction in transmission costs, which have fallen below 6 euros from 9.39 euros/MWh just one month ago.
In the competitive arena—driven by ever-lower transit costs and increased capacity—all countries, regardless of route, are “competing” to attract American LNG. For example:
- On the Baltic Pipe, which connects Denmark to Poland, the Danish operator has slashed its tariffs by 27%.
- At the German and the Czech Republic (Brandov point), import capacity has increased to 200 GWh/day (for bundled products, where one can reserve capacity simultaneously at more than one point) and 1,299 GWh/day (for non-bundled products).
- At the Poland-Germany border, the Yamal and Ontras-Gaz-System stations will be merged into a single Virtual Interconnection Point (VIP), and pricing will be harmonized.
- Ukraine is offering combined bundled products at the interconnection points with Hungary, Moldova, and Romania for the first time.
- Romania is offering export capacity at competitive prices to Ukraine for the first time.