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Gas TSOs from Bulgaria, Greece, Romania and Hungary sign MoU for the development of the “Vertical Corridor”

A Memorandum of Understanding (MoU) was signed today between DESFA (Greece), Bulgartransgaz (Bulgaria), FGSZ (Hungary), Transgaz (Romania), ICGB (Bulgaria) and Gastrade (Greece) with the purpose of their mutual cooperation for the realisation of the Vertical Corridor, which will enable bi-directional flows of natural gas from North to South and from South to North.

The signing of the MoU took place in the context of the 22nd World LNG Summit organised in Athens hosted by DESFA, under the auspices of the Ministry of Environment and Energy from 29 November to 2 December 2022.

By signing the MoU, the companies -affirmed their commitment – both jointly and individually – to the development of the necessary projects for the implementation of the Vertical Corridor. The MoU will be valid for three years with the possibility of an extension for another year. It is noted that the agreement builds upon the Memorandum of Understanding/Joint Statement signed by the Ministers of Energy of Greece, Bulgaria, Romania and Hungary for the development of the natural gas Vertical Corridor at the CESEC meeting held in Budapest on 8 September 2016.

“The ministerial decision and commitment on the realisation of the Vertical Corridor back in 2016 in Budapest have reached a new level with the signature of the Memorandum of Understanding today,” János Fehér, Member of the Board of Directors of FGSZ tells CEENERGYNEWS. “FGSZ has been working on the Hungarian elements of the project since then, the already realised capacity increase at the Romanian-Hungarian interconnection point is also part of it. FGSZ continues to work further on the planned elements of the Vertical Corridor that will increase the possibilities of reaching alternative sources and enhancing the security of supply in our region, at a time when Europe needs it even more than ever.”

Gas

The cooperation framework defined by the MoU foresees that the companies will explore the technical specifications of new connections, pipelines, interconnections or reinforcements of the existing networks and develop the planned projects in the region taking into account the EU’s energy strategies and policies, as well as the relevant developments in the regional gas market. Furthermore, the companies agreed that the Memorandum in question will form the basis of intensive cooperation in the future, in terms of the possibility of building the necessary infrastructure for the transport of natural gas to the transit countries and to the EU market from Greece through Bulgaria, Romania to Hungary and vice versa.

“Strengthening the collaboration of the Vertical Corridor is a way to unlock the potential of LNG to reach the markets along the corridor, as the North-to-South and South-to-North infrastructure is very critical,” said Maria Rita Galli, CEO of DESFA.

Ion Sterian, CEO of Transgaz who brought the signatories parties together, believes that the collaboration between them will be excellent as they all have already demonstrated the potential of their infrastructure.

“This new MoU follows the one signed in 2016 and renewed in 2019 and it builds on the collaboration between the signatories, the TSOs and Gastrade for building gas infrastructure and interconnections between the countries,” Mr Sterian tells CEENERGYNEWS. “For example, in Romania, we have finalised the BRUA corridor to ensure the security of supply to the Balkans in a big percentage. As the company with the biggest regional gas infrastructure, Transgaz has the possibility to transport 50 bcm of gas per year.”

“We were the missing link of this corridor so this MoU makes much more sense in respect of energy security and diversification of sources,” Teodora Georgieva, Executive Officer of the Gas Interconnector Greece-Bulgaria (ICGB), tells CEENERGYNEWS. “ICGB plays a very crucial role not only within the corridor but also for what concerns the LNG terminals of Revithoussa and Alexandroupolis. The interconnector began operations on time, in October, contributing to the energy diversification of the region and to Moldova in particular.”

The companies further agreed to invest reasonable efforts to achieve a non-exclusive long-term partnership for the development of the natural gas systems of the four countries and to initiate discussion on regulatory and economic aspects for the implementation of the Vertical Corridor. Finally, the companies agreed to seek, where appropriate and relevant, the facilitation and guidance of the European Commission.

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