Today’s annual auction marks the official restart for the Vertical Natural Gas Corridor, the first under the new regime of reduced tariffs and long-duration products agreed months ago with the Commission, and which constitutes a Crash Test as to how competitive it has become compared to other routes.
The bet will be decided not only by the now very low transit costs of the Greece-Ukraine route, which after the “cut” in the Romanian section have fallen to 5.85 euros/MWh and are considered among the lowest across Europe, but mainly by the demand that will be expressed both by Kyiv, in order to cover its needs for next winter, and by other countries.
Besides, the new regime now allows traders to lock in capacity at all the cross-border points of the countries lying between the starting point, namely Greece, and the end point, namely Ukraine.
"Our own route to Ukraine is now considered the 3rd cheapest across Europe, however Kyiv is not the only target market. For the Greek side, success should be considered the increase in exports in general," comment executives with knowledge of the processes.
In any case, beyond the certain participation of Bulgargaz, as well as DEPA, as its head Konstantinos Xifaras had recently stated, success will be judged by the quantities of the auctioned capacity (around 100 GWh) that will be booked, as well as any attraction of new players beyond those already known.
According to estimates by DESFA sources as well as the statement made weeks ago by Atlantic SEE itself (60% AKTOR, 40% DEPA), the booking of the auctioned capacity through the Sidirokastro gate is expected to range between 30%-50%, with potential customers from Bulgaria, Romania and Ukraine.
If the estimates are confirmed, we will be talking about the booking of quantities between 30 and 50 GWh which, while not considered particularly large, nevertheless, as market players comment, the following factors should not be overlooked.
Competition among routes
First, that this year’s period is being treated as preparatory in view of the 2027-2028 gas year, when the region’s disengagement from Russian natural gas supplies is completed.
Second, that the scope of the competition is enormous, regardless of the improvements that have been made to make the Vertical Corridor more attractive to traders and buyers.
This is shown by the fact that the annual auctions being held today across Europe, from South to North and from West to East, are very many, as recorded in detail in a note by ICIS journalist Aura Sabadus.
Both those concerning the Denmark-Poland, Lithuania-Poland, Germany-Poland and Germany-Czechia routes, as well as in our own neighborhood, namely between Croatia-Hungary, Greece-Bulgaria, but also via TurkStream, that is, the Turkey/Russia-Bulgaria route.
In reality, from March onward, when the Operators of the countries of the Vertical Corridor agreed with the Commission on a more attractive framework, the project ceased to operate under a special regime, by way of exception to the EU framework.
It is no longer a special case - as initially, for covering Ukraine’s needs last winter - but has been fully integrated into the European system, where countless LNG transport routes compete with each other over which will prove the cheapest and most attractive for gas traders and buyers.
The Turkstream factor
A third factor of interest concerns the response there will be for the booking of quantities via Turkstream. Although the gradual ban on Russian flows is underway, companies that have long-term contracts in force with Gazprom - and in our neighborhood there are quite a few - can still normally book capacity on TurkStream. Besides, the definitive ban on Russian flows in the EU enters into force on 30 September 2027.
And as the latest report by the European Union Agency for the Cooperation of Energy Regulators (ACER) also shows, Russian gas appears resilient. In the first five months of 2026, imports of Russian gas via pipelines increased by 7% year-on-year, while imports of Russian LNG rose by 11%.
Competition in tariffs
The above shows why today’s auction in the Vertical Corridor, that is, on the South-North axis, is important also for symbolic reasons. At the same time, the extent of participation will also show the impact of the sharp reduction in transport costs, which from 9.39 euros/MWh until a month ago has fallen below 6 euros.
In the field of competition, with the spearhead being ever lower transit costs as well as increased capacity, in order to attract American LNG, all countries are “playing” regardless of route. Indicatively:
- On the Baltic Pipe pipeline connecting Denmark with Poland, the Danish Operator “cut” its tariffs by 27%.
- At the Germany-Czechia border (Brandov point) import capacity has been increased to 200GWh/day (for bundled products, when one can book capacity simultaneously at more than one point) and 1,299GWh/day (non-bundled products.
- At the Poland-Germany border, the Yamal and Ontras-Gaz-System stations will be merged into a single virtual trading point (Virtual Interconnection Point - VIP) and tariffs will be unified.
- Ukraine is offering combined bundled products at the interconnection points with Hungary-Moldova-Romania for the first time.
- Romania is offering export capacity at competitive costs to Ukraine for the first time.