Efforts to boost the appeal of the Vertical Gas Corridor linking the Alexandroupoli LNG terminal with Ukraine have intensified in recent days, as both political and business actors seek to avoid another weak outcome in the LNG transport capacity auction scheduled for today. The tender covers volumes intended for Ukrainian demand in February and is widely seen as a critical test of the corridor’s commercial credibility.
Stakeholders are particularly concerned about the risk of repeating the December auction, which attracted no bidders. Another failure would undermine confidence in a project that Greece considers strategically vital and geopolitically important, especially given its strong backing from the United States. At the same time, the initiative continues to face a more cautious reception within parts of the European Union.
The auction is taking place amid ongoing regulatory uncertainty. Questions remain over whether the proposed transport products, known as Route 1, Route 2 and Route 3, fully comply with existing EU rules. These options involve different delivery paths to Ukraine, including routes via the Revythoussa LNG terminal, the Alexandroupoli FSRU, and the Trans-Adriatic Pipeline (TAP) connection at Komotini. Until greater clarity is provided, potential market participants remain hesitant.
Demand fundamentals further complicate the picture. Ukraine’s current need for imported gas is relatively modest, even during colder weather, largely because Russian attacks have damaged parts of its energy infrastructure, reducing overall consumption. As a result, Ukraine is prioritizing cheaper and more efficient supply routes.
Most Ukrainian gas imports are currently sourced through Hungary and Poland, whose proximity provides clear cost advantages over deliveries via the Vertical Gas Corridor. Competition has intensified as neighboring countries expand their export capabilities. Poland’s transmission system operator Gaz-System recently upgraded the Hermanowice station, increasing hourly export capacity to Ukraine from 600,000 to 720,000 cubic meters starting in February, further strengthening Poland’s position as a key supplier.
Against this backdrop, previously announced plans have stalled. A memorandum of intent signed in November between Greek DEPA and Ukrainian Naftogaz, covering gas deliveries for the January–March period, has yet to be activated. The deal was expected to be implemented through the Atlantic-See LNG Trade platform, but current market conditions have so far prevented it from moving forward.