This autumn, the Trans Adriatic Pipeline (TAP) celebrated its fifth anniversary, marking five years since the first cubic meters of Caspian gas for Europe began flowing from the giant Shah Deniz field in the Azerbaijani sector of the Caspian Sea in November 2020. This 877 km pipeline connects with the Trans Anatolian Pipeline (TANAP) at the Turkish-Greek border in Kipoi, crossing Northern Greece, Albania, and the Adriatic Sea before coming ashore in Southern Italy. TAP’s exit points in Greece and Italy facilitate the delivery of natural gas from Azerbaijan to several European markets. It also enables gas supplies to Southeast European countries through interconnectors. TAP is linked to the Gas Interconnector Greece-Bulgaria (IGB), which began commercial operations in October 2022, delivering Caspian gas to Bulgaria and thereby enhancing energy security in another European country. Since then, TAP has become a fully-fledged gas transmission system operator.
To date, TAP has transported over 52 billion cubic metres (bcm) of natural gas to Europe.
As a key element of the Southern Gas Corridor, TAP holds strategic and economic importance for Europe and plays a vital role in ensuring reliable access to a new source of natural gas. TAP contributes significantly to enhancing Europe’s energy security by providing supply diversification. The shareholders of TAP are: bp (20%), SOCAR (20%), Snam (20%), Fluxys (20%), and Enagás (20%).
The market situation today remains relatively moderate for producers, with prices holding at $368 per 1,000 cubic meters in November and $330 in December. While underground gas storage (UGS) levels stood at 70% at the beginning of 2025, GIE data shows that a net withdrawal of 15 billion cubic meters since the start of the heating season has left storage at 69.29%. This compares to 77.9% during the same period last year.
At the same time, domestic production within the EU continues to decline. In 2024, it amounted to approximately 40 billion cubic meters—a 12.4% decrease from the previous year—confirming that Europe has entered a permanent phase of import dependency exceeding 85%.
With consumption stabilizing at 360–370 billion cubic meters per year, the need to diversify sources and routes remains critically important—not only for security reasons but also to maintain competitive prices in a market that remains vulnerable to global fluctuations.
Major pipeline suppliers to EU
Norway remains the foundation of Europe’s gas supply. Through its North Sea pipelines, it reliably delivers 120–124 billion cubic meters of gas per year, supported by long-term contracts, high technical readiness, and a stable political environment. These flows account for nearly 30% of Europe’s gas consumption and serve as the cornerstone of the continent's overall energy balance.
Norway remains the most stable and predictable supplier in Europe; however, its production is approaching the natural limits of mature North Sea fields. While Norway is primarily a pipeline supplier, it also exports small but steady volumes of LNG (6–7 bcm) from the Hammerfest/Melkøya terminal, adding further flexibility to the European supply portfolio.
Most of the large fields discovered in the 1970s and 1980s are now in the depletion stage. Consequently, the Norwegian government has launched new licensing rounds and approved the development of additional fields in the Barents and Norwegian Seas, which should help stabilize production in the second half of the decade. These new projects—smaller in scale, more technically complex, and often located in harsher environments—are expected to partially offset the natural decline in production, though they will not be able to replicate the production peaks of previous decades.
In terms of pipeline deliveries, Algeria supplies approximately 25–30 billion cubic meters (bcm) per year to Italy and Spain via the TransMed and Medgaz pipelines, although volumes fluctuate depending on Algeria’s domestic demand and production constraints. At the same time, Algeria is facing declining output from aging fields and rising domestic consumption, which reduces the volumes available for export.
Azerbaijani gas adds another 10 billion cubic meters (bcm) per year via the TAP pipeline, with the potential to double its capacity to 20 bcm in the coming years. Increasing production, however, requires further investment.
As for Russia, its theoretical capacity to restore gas exports to the EU remains high, but the political conditions for such a return are absent. Russian gas, which once dominated with nearly 40% of the market, has seen its pipeline volumes drop—primarily flowing through TurkStream at approximately 10–12 billion cubic meters (bcm) per year. Meanwhile, Russian LNG deliveries to Europe fluctuate between 14–17 bcm, significantly below pre-2022 levels.
Restoring significant flows would require political and institutional changes that are not currently foreseen: the lifting of sanctions, new transit agreements with Ukraine and Central Europe, full alignment of payment mechanisms with the EU/G7 framework, and the signing of new long-term contracts with European buyers. Under such conditions, Russian exports could theoretically return to their pre-2022 figures of 120–126 bcm per year via pipelines and 49–54 bcm per year as LNG.
On the other hand, Russia is reorienting its production toward Asia, primarily to China via the Power of Siberia pipeline. However, this market cannot immediately absorb the volumes previously destined for Europe. Consequently, the question of Russian pipeline gas presence on the European market remains open for the development of new cooperation formats.
LNG suppliers
The remaining supply volumes are accounted for by LNG, with the United States providing 55–60 billion cubic meters (bcm) per year. Flexible supply chains and spot-pricing mechanisms allow Europe to compete effectively with Asia for cargoes during periods of peak demand.
In the United States, LNG export capacity currently stands at approximately 160 bcm per year and is projected to grow by an additional 145 bcm by 2029. However, rising capital expenditures and various overhead costs will necessitate nearly $200 billion in new investment. These factors, combined with intense competition from Asian markets, could drive up the cost of U.S. LNG for the European market.
But there is Qatar, whose production is controlled by the American company Exxon. Qatar supplies 15–20 billion cubic meters of LNG annually and maintains a stable presence thanks to long-term contracts, with additional volumes expected after the North Field comes into operation following 2027-28, considering the long construction timeframes for new liquefaction trains and offshore platforms..
Egypt, once an emerging LNG exporter, has become a net importer due to falling production, a limited number of new discoveries, and rapidly growing domestic demand driven by population growth and electricity needs.
Smaller but steady volumes of LNG arrive from Nigeria (typically 8–12 billion cubic meters per year) and Trinidad and Tobago (about 3–5 billion cubic meters), providing additional flexibility to the European system.
The LNG terminal in the city of Krk, Croatia, has a capacity of 6 billion cubic meters per year. Croatia, despite consuming only 3 billion cubic meters per year, has become one of the most strategically important hubs in the region. The Floating Storage and Regasification Unit (FSRU) in Krk supplies Hungary, Slovenia, Slovakia, and parts of Austria, effectively creating a new north-south LNG corridor that bypasses traditional east-west routes.
Western and Central Europe have effectively turned into an LNG-oriented market, writes moderndiplomacy.eu, and LNG currently accounts for nearly 40% of all gas imports, compared to less than 20% a decade ago. This shift has increased the strategic importance of regasification terminals in the region. Terminals in France (Dunkirk, Montoir-de-Bretagne, Fos), Spain (with seven terminals and a capacity of over 60 billion cubic meters per year), the Netherlands (the Gate terminal and the FSRU in Eemshaven), and the United Kingdom (Isle of Grain, Milford Haven) operate with consistently high availability. Together, they form a network of critical reception points capable of receiving more than 150 billion cubic meters of LNG per year and redistributing it into the European grid, allowing for the rapid redirection of cargoes to Central and Northern Europe depending on market conditions.
Mixed Supplies
Greece, which consumes about 5 billion cubic meters per year, has become a regional entry point thanks to Revithoussa, the new Floating Storage and Regasification Unit (FSRU) in Alexandroupolis, and TAP. This infrastructure ensures northward flows into Bulgaria, Serbia, and Romania. Bulgaria, with a consumption of about 3 billion cubic meters per year, now relies on a combination of supplies from the IGB (Interconnector Greece-Bulgaria), "TurkStream," and LNG imports via Greece.
Italy, with an annual consumption of about 70 billion cubic meters, has transformed into one of Europe's most important gas hubs. This is made possible by gas from Algeria via TransMed, from TAP, and from its three LNG terminals in Ravenna, Venice, and La Spezia, which together provide more than 20 billion cubic meters per year of additional capacity. Italy not only secures its own supplies but also serves as a critical transit platform, sending up to 10 billion cubic meters per year to Central Europe through its interconnections with Switzerland and Austria.
Italy links North African pipeline gas, Caspian pipeline gas, and global LNG to the heart of the European network. In doing so, it provides a third southern LNG gateway alongside Greece and Croatia, creating a redundant multi-channel architecture that allows Europe to absorb shocks, redirect flows, and maintain supplies even if one of the corridors is disrupted. Thus, Italy's position strengthens the resilience of not only Southern Europe but the entire continental system, acting as a balancing node between east-west and north-south flows and reducing structural dependence on any single supplier or route.
At the same time, Romania is the only European country with significant domestic production—approximately 10–11 billion cubic meters per year—which covers nearly all of its consumption. Black Sea fields, such as Neptune Deep, are expected to increase production even further after 2027, providing the region with a rare pocket of energy autonomy.
Serbia, in contrast, consumes about 3 billion cubic meters per year and remains heavily dependent on Russian gas supplied via "TurkStream," with very limited options for diversification. Hungary, with a demand of approximately 9 billion cubic meters per year, is the largest recipient of gas via "TurkStream" in the region and continues to rely on Russian volumes, supplementing them with gas from the Krk LNG terminal and reverse flows from Slovakia and Austria.
Thus, the role of Caspian gas on the European market remains balancing and vital; at full capacity, it is capable of meeting up to 10% of the European market's gas consumption. A short-term deficit persists, driven by scheduled maintenance, high demand in Asia, and uncertainty regarding federal and various other types of permits. At the same time, engineering costs for new gas liquefaction capacities have risen sharply, which could at any moment necessitate supplementation with pipeline gas.
This, in turn, requires the reduction of existing geopolitical risks and a new wave of cooperation involving high-tech oil and gas companies, as well as incentives for long-term investment in gas upstream. Pipeline supplies will make it possible to reduce the European economy's dependence on the volatility of the TTF index, which has become the international "signal" determining where LNG cargoes will move. Europe, operating without extensive long-term contracts and relying heavily on the spot market, must maintain the index at levels capable of attracting cargoes away from Asia. When demand in Asia rises, the TTF must rise along with it to preserve Europe’s influence over global LNG flows, which will impact energy costs for households and businesses.
