Diversification of gas supply sources and routes

A key part of ensuring secure and affordable supplies of energy to Europeans involves diversifying supply routes. This includes identifying and building new routes that decrease the dependence of EU countries on a single supplier of natural gas and other energy resources.

The Southern Gas Corridor

The Southern Gas Corridor (SGC) is a 3 500 km pipeline that supplies gas to south-east European countries from the Shah Deniz gas field in the Caspian Sea, off the coast of Azerbaijan. The SGC entered into operation in December 2020 and is made up of 3 sections, each with its own shareholder structure

• The South Caucasus Pipeline (SCP-X) across Azerbaijan and Georgia
• The Trans Anatolian Pipeline (TANAP) across Türkiye
• The Trans-Adriatic Pipeline (TAP) across Greece, Albania, under the Adriatic Sea and over to Italy

In addition, the SGC can supply Bulgaria and the Balkan/Lower Danube region via the Interconnector Greece-Bulgaria (IGB).

Gas supplies from Azerbaijan to the EU via the SGC have already increased by more than 40% from 2021 to 2024. Azerbaijan’s oil and gas company SOCAR has been supplying gas to 14 countries (including 8 EU countries): Bulgaria, Croatia, Georgia, Greece, Hungary, Italy, North Macedonia, Romania, Serbia, Slovakia, Slovenia, Syria, Ukraine and Türkiye.

In the context of the REPowerEU plan, the EU is carrying out a number of actions to enable more users to gain access to Azerbaijani gas through the SGC. A Memorandum of Understanding on a Strategic Partnership in the field of energy was concluded by Commission President von der Leyen and Azerbaijani President Aliyev in Baku on 18 July 2022. Under this partnership, the EU is working to increase gas supply, subject to gas availability and market demand, and to facilitate relevant infrastructure upgrades accordingly. The EU is also making progress with various gas infrastructure projects that extend the reach of Azerbaijani gas in the EU and the Western Balkans, such as the Adriatic backbone and the strengthening of the Bulgarian and Romanian systems.

The Diversification Initiative

The Diversification Initiative will support companies in South-East and Central Europe in finding viable and competitive alternatives to Russian gas, following up on the REPowerEU plan to phase out Russian gas from the EU. 

Even if the EU achieved a very significant reduction of the share of Russian gas in the energy mix, the remaining Russian gas supplies still pose a risk to European customers. 

South-East and Central Europe 

EU countries and candidate countries in this region remain vulnerable to disruptions of Russian gas supply. Their companies with substantial downstream operations, or customer bases (retail and industrial) having a direct effect on lives of millions of people, should be protected from political influence that may be associated with supplies of Russian gas. 

Cooperation and planning

As a first step, the Commission aims to assess the scale of risk related to potential further disruptions of Russian gas supplies to the Union and the candidate countries. This is why companies in South-East and Central Europe are invited to inform the Commission about their gas needs in short and long-term. 

With this knowledge, the Commission will be able to design strategies to find alternative suppliers and to take full stock of the experience gained at the peak of the energy crisis in 2022 and consecutive years. 

The baseline course of action would be to identify the most appropriate global suppliers and to gather them together with the interested European buyers at a dedicated event. 

Who can participate and how? 

It is a voluntary initiative for Europe based buyers and users of natural gas. The focus region is South-East and Central Europe where the Commission invited the EU countries and candidate countries to identify companies that could benefit from the Initiative. The governments were asked to give particular attention to 

• companies with existing or terminated since 2022 long-term contracts with Gazprom
• companies with substantial downstream operations or customer bases (retail and industrial) in South-East and Central Europe
• companies with an annual demand of at least (0.5 bcm)

The Diversification Initiative timeline

The Commission invited countries to identify companies that could benefit from the Initiative and aims to collect relevant data on the risks present in the concerned region up until the end of 2025. 

The event for European buyers and global suppliers is to be scheduled for Q1 2026. 

Developing the Mediterranean hub

The creation of a Mediterranean gas hub in the South of Europe will help diversify EU's energy suppliers and routes. To this end, the EU is engaged in an active energy dialogue at political level with North African and Eastern Mediterranean partners.

Taking into account the huge potential of Algeria, both for conventional and unconventional gas resources, as well as the new gas resources in the East Mediterranean and the associated infrastructure development plans, the Mediterranean area can act as a key source and route for supplying gas to the EU.

Israel, Egypt and Cyprus, because of their significant offshore gas reserve, make the Eastern Mediterranean region a strategic partner for the EU in its effort to diversify its gas supply routes. There are several options to bring natural gas from the region to the EU and the world market either by pipeline or as LNG. Notably, there are two Projects of Common Interest (PCIs) in gas involving the Cyprus East Med Pipeline and CyprusGas2EU LNG terminal, where the latter granted significant Connecting Europe Facility (CEF) grants at the end of 2017.

Liquefied natural gas terminals

Liquefied natural gas (LNG) imported to Europe through LNG terminals is a source of diversification that contributes to competition in the gas market and security of supply. To adapt to this evolution of the world gas market, in February 2016, the European Commission presented an EU strategy (COM(2016) 49 final) for LNG and gas storage.

New LNG supplies from North America, Australia, Qatar, and East Africa are increasing the size of the global LNG market, and some of these volumes have already reached the European market.

Considering that most of the existing capacity is located in Western Europe, and that internal bottlenecks exist from the Atlantic coast to the East, the EU strategy has identified a limited number of essential ‘projects of common interest’, mainly interconnectors, that would allow market players from all corners of the EU to benefit from LNG. In addition, as is the case in the Baltics and in South-East Europe, a number of LNG regasification units have been identified as Projects of Common Interest under the Regulation on guidelines for trans-European energy infrastructure ((EU) 347/2013).