Market test for Vertical Gas Corridor failed

Greek natural gas transmission system operator DESFA organized a binding market test from 2 to 12 July in order to determine? investor interest on capacity boosts at the country’s gas network entry and exit points.

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However, the procedure failed to attract any significant investor interest, as was also the case with equivalent market tests staged by six other countries included in the Vertical Corridor plan.

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DESFA and its six counterparts involved in the Vertical Corridor plan: Bulgarian Bulgartransgaz , Romanian TRANSGAZ SA , Hungarian FGSZ F?ldgázszállító Zrt. , Slovakian eustream, a.s. , Moldovan VMTG and Ukrainian GTSOU, have scheduled a meeting for next week to seek ways that could enable the project to qualify for EU funding support, not possible under its current framework.

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Overall investments of nearly 3 billion euros will be needed, with one billion euros required in Romania alone.

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Capacity bookings submitted during the market tests were limited to short periods of one year, falling well short of an objective to secure 15-year capacity bookings, necessary to make such investments viable.

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With the exception of one long-term capacity booking submitted for the exit point from Bulgaria to Romania, market tests for all other Vertical Corridor sections failed to attract 15-year capacity bookings.

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Large network investments required between Romania and Hungary discouraged users from bidding, while, from Greece to Bulgaria, interest was non-existent.

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These developments come as no surprise, given that cheaper Russian pipeline gas is flooding southeastern Europe and undermining any investment aimed at achieving energy independence from Russia.

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