US and European energy officials gather in Athens on 6 November at the 6th Partnership for Transatlantic Energy Cooperation (P-TEC). The summit aims to discuss Southeastern Europe’s revamped energy agenda, focusing on the acceleration of US Liquid Natural Gas (LNG) flows into the region. Greece, host of the summit, is positioning itself as a regional energy hub, doubling down on LNG infrastructure investment in pursuit of an upgraded geopolitical role.
The ‘energy hub’ narrative stems from the energy crisis of recent years, which saw European countries turn to LNG – much of it shipped from the US – to compensate for dramatically reduced Russian pipeline inflows. Since then, Europe’s regasification capacity – allowing it to convert LNG back into gas for distribution – has increased by 32 per cent. Gas consumption in the EU decreased by 17 per cent due to REPowerEU energy efficiency and clean energy initiatives.
New EU sanctions against Russia, targeting the complete phase out of Russian LNG by 2027, emphasize the urgent need for alternative supply, especially as the last Russian pipeline to Europe through Turkey goes offline by 2028. Greece’s strategic position, at the intersection of continents and a gateway to the Balkans, bolsters its candidacy as a suitable hub.
US imports stand to play a leading role in this project. July’s EU–US trade deal featured a pledge that the EU would purchase $750 billion of US energy products over three years. Meanwhile, the US and Qatar are pressuring the EU to loosen climate regulations to permit greater LNG flows.
Against this backdrop, Greece is developing two new import terminals, in addition to the existing facilities at Alexandroupolis and Revithoussa (Attica). The intention is that Greece will become the source of new LNG supplies to the region via the ‘Vertical Corridor’, a pipeline network passing from Greece through Bulgaria, Romania, and Moldova to Ukraine. This route recently became more attractive, after participating countries multilaterally reduced their transit tariffs to compete with a northern route from Lithuania and Poland.
However, while the ‘energy hub’ project will make an important contribution in the short term and could upgrade Greece’s geopolitical role, long-term reliance on US LNG carries significant economic and environmental risk.
High prices and uncertain reliability
The Russian invasion of Ukraine saw natural gas prices spike, leading to exorbitant electricity prices throughout Europe. Prices stabilized in the past year, but natural gas remains almost triple the price of pre-crisis levels.
Since the start of the war, EU countries have spent €258 billion on LNG imports. This has played an important role in ensuring energy security – but unlike pipeline gas, which ensures some fixed security of supply, US LNG works with ‘free-on-board terms’, meaning that sellers can redirect shipments to the highest-bidder across the globe.
That means that regardless of the level of new infrastructure Greece builds, it and other countries in the region will remain exposed to global gas price volatility and risk, potentially keeping electricity prices structurally high without guaranteeing supply. In 2025, on average, Greece bought US LNG at the highest price in Europe.
Additionally, the EU’s carbon permit prices are expected to soar in the coming years, putting further pressure on electricity prices from fossil fuels. That will reverberate throughout the economy and influence the region’s competitiveness. Should US electricity prices rise – a real possibility as the US administration inhibits green energy projects and energy demand from data centres increases – this risk could be exacerbated.
The environmental impact of LNG is also considerable. Long touted as a ‘transition fuel’, new research with the help of satellite data has shown LNG methane leakage could be far worse than previously estimated. Though emitting less carbon dioxide than coal, LNG’s elevated methane emissions would have a stronger short-term warming effect. The long transport and regasification process further exacerbates the environmental impact. Increasing reliance on LNG therefore risks jeopardizing EU decarbonization goals and legitimacy.
The alternative
Greece is well-positioned as a stable hub to distribute supply gas to Southeastern Europe. Yet, it is also well-suited to become a regional hub for clean energy – one that can help fulfil the EU’s energy security needs while protecting its decarbonization targets.
Greece is already a regional leader in green energy generation: green sources produce over half of the country’s electricity and are expected to grow. Continuing momentum towards the green energy transition could help attract alternative overseas investment, as clean energy initiatives retreat from the US. Greece would also increase its soft power by distinguishing itself as a climate leader, in contrast to other countries such as Turkey, which recently announced massive new coal subsidies.
Acceleration of investments in storage technologies, such as batteries (BESS), would be key to maximize the utility of Greece’s vast renewable energy sources. Last year, about 10 per cent of renewable energy generation was curtailed (wasted) during high-output hours, signalling a dire need for energy storage to relieve grid congestion. The market conditions are favourable to battery growth given negative prices and high intraday spreads. However, licensing and permitting in Greece remain an obstacle to the purported goal to install 4.7GW of battery capacity in the country by 2030.
Clean technology also involves risk, mainly related to reliance on Chinese imports of batteries and renewable energy components. But it is a one-time-deal: once the infrastructure is established, energy supply would be far less exposed to the kind of continuous reliance produced by gas supply.
Regardless of the challenges, Russia’s invasion of Ukraine has clearly demonstrated the inherent risk in, fossil-fuel imports-based energy strategies. Indeed, European natural gas demand is expected to fall next year, raising the risk that new LNG terminals become stranded assets.
Exports
A common argument for Greece’s LNG hub ambitions is that it has an opportunity to become an energy exporter to the Western Balkans. With some exceptions, countries in the region use minimal gas, but much of what is used derives from Russia. New Greek sources could therefore provide an important stop-gap.
However, in the long term, Greece should plan to export electricity to the region rather than gas. That will prevent locking western Balkan countries into fossil fuel-based solutions, lower electricity prices, and align with their EU membership ambitions.