The Russian-Ukrainian war has significantly changed the global political and economic agenda. Not only the existing world order, but also critical infrastructure and energy supply systems began operating under new approaches and logic. The European Union decided to phase out Russian gas, on which it has relied for decades, and replace the east-west supply chain with a north-south energy corridor. Liquefied natural gas terminals, whose numbers are growing every day, replaced pipeline gas supplies. 

The technology for converting liquefied natural gas (LNG) into natural gas is not new. Technologies for converting liquefied gas back into a gaseous state have been in use since the 1960s. For this purpose, special onshore stations (terminals) were built, where it was converted back into natural gas. Building such stations is very expensive and takes a long time, up to 5-7 years. In the early 21st century, construction began on specialized ships, so-called Floating Storage and Regasification Units (FSRU), that carried out these operations directly at sea. In 2005, the first offshore station of its kind was commissioned in the Gulf of Mexico. The principle was simple: a terminal for receiving cargo from tankers carrying liquefied gas is set up a few kilometers offshore, then heats the gas using seawater or other methods, and pumps it through pipelines to shore, where the natural gas enters the distribution network. Over the past 2 decades, dozens of such stations have operated worldwide, but demand for them has surged since the start of the Russian-Ukrainian war in 2022.  

Before the war, Russia was the main supplier of gas to Europe. Gas pipelines and other infrastructure, built back in the Soviet era, met the European continent’s gas needs, and this infrastructure, which had been developed over decades, operated without interruption. The situation changed dramatically after February 2022, when the European Union decided to completely end its dependence on Russian energy resources. A costly and difficult process is beginning to replace the east-to-west gas supply system with a north-to-south gas corridor; liquefied natural gas plays a key role in this process and consequently so do floating and onshore regasification terminals. For instance, until 2022, Germany did not have any terminals for regasifying imported gas and relied on supplies from Russia. Significant investments are currently being made in this field, and the number of such stations is growing both in Germany and in many other European countries.      

Although significant work has been done in a short period to diversify energy sources and reduce the EU’s dependence on Russian gas, certain vulnerabilities remain. Under the new project, investments are being made primarily in the Black Sea regions, while the secondary branches intended to connect Central Europe to the project are developing slowly, especially in Slovakia, Hungary and the Western Balkans. 

To connect existing and planned liquefied natural gas terminals on the coasts of the Baltic, Adriatic and Aegean Seas to operational gas distribution networks, it is necessary to establish a system of interconnectors and gas pipelines capable of reverse flow. This reorientation requires significant investment, and the decision was made quickly and amid crisis. This is precisely why a fully coordinated regional system has not yet been established. The development of physical infrastructure was the first step in shaping the Black Sea basin, the most remote part of Central and Eastern Europe, which led to uneven development. To transform the physical infrastructure into a functioning market, harmonized regulatory requirements, a transparent customs system, and a mechanism for the proportional allocation of the total volume are necessary. 

The North-South gas corridor is centered on 4 major liquefied natural gas terminals, each with its own owners, service areas, and commercial structure. The first of these is the terminal in Świnoujście, Poland, on the southwestern coast of the Baltic Sea. Its capacity has already reached 8.3 billion cubic meters. As the largest liquefied natural gas terminal in Central and Eastern Europe, it is the first major hub at the northern entry point of the North-South corridor. Meanwhile, a new floating regasification terminal with a capacity of 6.1 billion cubic meters is under construction in the Polish city of Gdansk, and it is scheduled to begin operations in 2028. Once they reach full capacity, these two terminals will meet up to ¾ of Poland’s gas needs, while also turning the country into a distribution hub for the northern corridor. 

The Baltic states have also long considered how to achieve energy self-sufficiency and break free from dependence on Russia. Since 2001, the Baltic states have been connected to the BRELL power grid, an acronym formed from the first letters of Belarus, Russia, Estonia, Latvia, and Lithuania. This system had been in place since the Soviet era, and the power grids of all countries operated in sync (at a frequency of 50Hz). Although the desire to break free from Russia’s sphere of influence was not new, the final decision was made in February 2025. Within two days, the Baltic states will disconnect from the BRELL system and synchronize their power grids with the European power grid using the Lithuania-Poland power line (LitPol Link). This project cost about $1.6 billion and took several years of preparation. It is also worth noting that Russia relied, to a certain extent, on the BRELL system: the Baltic states supplied electricity to Kaliningrad specifically through this system. Russia, in turn, has significantly increased the energy self-sufficiency of Kaliningrad by building several thermal power plants and a floating regasification unit between 2019 and 2024.

As for the North-South gas corridor, the Lithuanian section of the Baltic Sea coast has also become a key hub for gas supplies. In 2014, a floating regasification terminal with an annual capacity of 3.7 billion cubic meters began operations in Klaipeda, Lithuania. The Baltic states have now completely stopped using Russian gas.  

The Croatian Island of Krk is a key southern hub of the North-South gas corridor, where another regasification terminal with a capacity of 6.1 billion cubic meters operates. The Krk hub serves as a gas redistribution point, supplying Hungary, Slovenia, and the Balkan markets. The hub is directly connected to the Central European gas transmission network.   

The southern gateway to the North-South gas corridor is the Greek city of Alexandroupolis, located north of the Thracian Sea. It has a regasification terminal with a capacity of 5.3 billion cubic meters. From here, gas is supplied to Bulgaria, North Macedonia, Serbia, and Bosnia and Herzegovina. Connected to Bulgaria via the Greece-Bulgaria interconnector, the hub plays a critical role in supplying gas to Eastern Europe and supporting the North-South energy corridor. 

Vertical Gas Corridor (VGS) Project  

The Vertical Gas Corridor initiative is a practical and conceptual extension of the North-South gas corridor. Based on the concept, this corridor was intended to ensure gas supplies from the south, from Greece, to the north, with final destinations in Ukraine and Moldova. Active discussion of the initiative began in 2020 and concrete steps have been taken since the start of the Russian-Ukrainian war. The project includes Greece, Bulgaria, Romania, Hungary, Slovakia, Moldova and Ukraine. The launch of the floating regasification terminal in Alexandroupolis, Greece, in late 2024 is of particular significance, as it will also serve as a key hub for vertical gas supply chains. These projects aimed at reducing dependence on Russian gas supplies are actually not all that new and have a long history. The Vertical Gas Corridor is no exception either.   

The project concept was presented in 2016 by Ion Sterian, director of Transgas S. A., the Romanian state-owned gas transmission system operator. In September 2016, the energy ministers of Greece, Bulgaria, Romania, and Hungary, followed by the executive directors of Interconnector Greece-Bulgaria (ICGB), adopted a joint statement, effectively establishing the Vertical Gas Corridor. Between 2016 and 2022, memorandums were signed primarily between the gas transmission system operators of the founding countries.  Gastrade, the owner of a floating terminal in Alexandroupolis, soon joined the memorandum of cooperation, followed by Ukraine, Moldova and Slovakia. In early September 2026, North Macedonia also joined the project during the 10th Southeast European Energy Forum (SEEF). 

Besides the regasification terminal in Alexandroupolis, the Trans-Balkan Gas Pipeline, an infrastructure project also inherited from the Soviet era, played a key role in operating the Vertical Gas Corridor. Construction of the gas pipeline began in the 1960s when gas fields were discovered in Western Siberia. In the mid-1970s, Russian gas began to be supplied to Bulgaria, and by 1988, the gas pipeline had been extended to Turkey. Gas supplies to Eastern Europe have continued since the collapse of the Soviet Union.  The Trans-Balkan gas pipeline was a one-way pipeline: gas flowed through it only from Russia, from north to south.  

After the start of the Russian-Ukrainian war, Europe decided to operate the gas pipeline in reverse mode and pump gas from Greece to Bulgaria and Romania, and later to Ukraine and Moldova. The infrastructure built during the Soviet era is rapidly becoming one of the key factors in reducing Eastern Europe’s dependence on Russian gas.  

The idea of the North-South gas corridor, however, originated even earlier, and its roots lie in the United States. The idea was proposed in 2014 by U.S. General James L. Jones and Ian Brzezinski. General J. Jones served in the Marine Corps, held the position of Supreme Allied Commander Europe, and later served as President Obama’s National Security Advisor. Since 2010, he served as chairman of the Atlantic Council. Although Ian Brzezinski was not a career military officer, he served as Deputy Assistant Secretary of Defense for Europe and NATO Policy. He is the son of the renowned diplomat Zbigniew Brzezinski. 

In 2014, they jointly prepared a report titled “Completing Europe. From the North-South Corridor to Energy, Transportation and Telecommunication Union”, where they put forward the concept of a North-South Corridor.  

The report notes that despite billions of euros spent, infrastructure in Europe, especially in Central and Eastern Europe, remains incomplete. Countries in these regions are still burdened by insufficient integration and weak infrastructure connectivity with Western Europe. It was noted that the North-South link remains underdeveloped, while the East-West direction maintains a significant presence.

From their perspective, the current situation is a consequence of the Soviet legacy, when Moscow hindered infrastructure integration to maintain dependence on the Soviet Union. The harmful effects of a lack of integration were particularly evident in the energy sector. “Central European countries generally lag behind their western peers in terms of connectivity. Moreover, Central European nations that remain outside of the EU, most notably Moldova and Ukraine, are further disconnected from the EU and are vulnerable both economically and politically,” the study notes. “There are two main reasons for developing a North-South Energy Corridor. The most immediate is enhancing Europe’s energy security by eliminating “energy islands” that are not connected to mainstream European pipelines and grids. These “islands” are vulnerable due to single-source supply disruptions. This is particularly important in the case of the Baltic states, given their reliance on energy imported from Russia. It also applies to Bulgaria, which is wholly dependent on Russia for gas supplies. However, it should be noted that the term “North-South Corridor” is commonly used to refer to connections between the Baltic countries, Poland and countries with coastlines on the Adriatic and Black Sea. The second reason is that the corridor will help to create an effective, single energy market for the EU,” the study notes. 

American analysts’ interest in the North-South energy corridor was no coincidence. The United States has had (and currently has) a direct interest in the European continent’s energy system. This corridor is almost completely driving Russian gas out of the European market; meanwhile, the United States, as is well known, is the world’s leading exporter of liquefied natural gas, accounting for about 58% of its supplies to Europe. Given that under the European supply regulations, the use of Russian gas must be completely phased out by the end of 2026, the volume of U.S. liquefied natural gas shipments to Europe will keep growing. Furthermore, shifting energy supplies would significantly weaken Russia’s influence in Eastern Europe.  

Ukraine’s Underground Gas Storage Facilities 

Ukraine’s underground gas storage facilities are vital to the North-South energy corridor and to the Vertical Gas Corridor. According to the International Energy Agency (IEA), underground gas storage facilities are the primary sources of flexibility in gas supply at both the global and regional levels. They help balance seasonal gas consumption and storage. About 90% of Europe’s underground gas storage facilities are in operation; the only exception is Ukraine. Ukraine ranks third in the world in terms of gas storage capacity, behind only the United States and Russia. The storage facilities, originally built during the Soviet era and subsequently expanded, have a capacity of approximately 31 billion cubic meters. 

The war, the damaged infrastructure and general instability in the country naturally have a negative impact on Ukraine’s natural gas supply system. According to various data, Ukraine’s proven natural gas reserves amount to approximately 1.1 trillion cubic meters; however, in recent years, the country has been forced to import certain volumes. As noted earlier, the Vertical Corridor gas project is also intended to meet gas demand and ensure that Ukraine and Moldova are self-sufficient.  

In 2025, Ukraine imported about 6.5 billion cubic meters of natural gas, the highest volume since 2021. Ukraine imports gas from several countries; Poland and Hungary account for about 1/3 of the total volume, mainly due to their geographical proximity and relatively low gas transportation rates. Both countries ensured an uninterrupted flow, and gas supplies continued even during a period of disagreements between Kyiv, Warsaw, and Bucharest on several political issues. The cause, perhaps, was support for the Ukrainian resistance and EU legislation on gas transit, which neither side wanted to violate. 

Some Ukrainian gas storage facilities are near the front lines, while others are difficult to fill due to damage to their infrastructure. According to some sources, Ukraine’s gas storage facilities can hold about 9 billion cubic meters of gas. However, it should also be noted that to ensure the uninterrupted operation of storage facilities and maintain sufficient gas pressure within them, a certain volume of gas, so-called “long-term storage gas or buffer gas,” must be permanently stored there. In the case of Ukraine, the “buffer gas” volume reached 4.7 billion cubic meters.   

Despite supply and production challenges, as of the end of 2026, according to various sources and official statements, Ukraine’s underground gas storage facilities had accumulated 14.7 billion cubic meters of gas, including “buffer gas”.

Cross-border and interstate regulation is also important for the economic and energy efficiency of Ukrainian storage facilities. Since 2020, Ukraine has largely resolved this issue by aligning its regulatory requirements with EU standards, significantly reducing the costs incurred by EU traders for renting warehouse space. 

However, the war is significantly disrupting the use of gas storage facilities, which could also serve as an additional reserve resource for the EU. For this reason, 3 billion cubic meters of gas were stored in Ukrainian storage facilities under lease agreements in 2023, the highest figure compared to 2024-2025. 

The Ukrainian state-owned company Naftogaz has proposed using part of its underground storage facilities to replenish the EU’s strategic reserves by the end of 2025. The main challenges, however, relate to warehouse management, investment opportunities and private-sector participation. 

The shift in gas supply sources in Central Europe is taking place against a backdrop of conflicting trends: on the one hand, it can be stated with certainty that Russian gas supplies have virtually ceased, and the EU is developing new gas infrastructure; on the other hand, numerous unresolved issues remain regarding gas prices, cross-border connections and customs regulations. The ongoing conflict in the Middle East is creating additional challenges for gas supplies, affecting global prices for both oil and liquefied natural gas, and disrupting alternative supply chains. Resolving these issues will likely take a long time, as progress on many of them depends directly on the course of the Russian-Ukrainian war and the conflicts in the Middle East.