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Vertical Corridor - Memorandum of Understanding

Cooperation for the Vertical Corridor is strengthened with the signing of a Memorandum of Understanding for the participation of Slovakia, Moldova and Ukraine.

The Memorandum of Understanding signed in the framework of the CESEC Ministerial Conference strengthens the security of supply of Central and South-Eastern Europe.

An important step towards the security of supply for Central,  South Eastern Europe, Moldova and Ukraine was taken on Friday, January 19, 2024, by the natural gas infrastructure operators participating in the Vertical Corridor initiative, with the signing of a Memorandum of Understanding (MoU) for the inclusion of Slovakia (EUSTREAM), Moldova (Vestmoldtransgaz) and Ukraine (GTSOU) in the initiative on the sidelines of the Ministerial meeting of the High Level Group on Central and South Eastern Europe Energy Connectivity (CESEC) held in Athens.

This MoU seals the intensive cooperation developed by gas and LNG transmission system operators from Greece, such as DESFA and Gastrade, Bulgaria (ICGB, Bulgartransgaz), Romania (Transgaz), Hungary (FGSZ) and Slovakia (EUSTREAM), following the meeting organized at the initiative of DESFA last September in Thessaloniki, in order to respond in a coordinated manner to the need to strengthen energy security and further diversify sources of supply.

The full activation of the Vertical Corridor, through the appropriate upgrading of the networks of the above countries, will allow the transport of gas from the South to North and vice versa, through European natural gas and LNG transmission systems, leveraging the enhanced capabilities of the new and under development FSRUs in the area. This potential can be further extended by the use of said infrastructures for renewable gases and hydrogen.

The Operators signing the MoU express their commitment to promote PCI and other necessary projects, jointly or individually, for the activation of the Vertical Corridor, underlining at the same time their intention to support each other in securing funding from European and other funding sources for these projects. They also agree to seek, where appropriate, the facilitation and guidance of the European Commission.

As for the next steps, the participants prioritize their coordination, according to market-based solutions and European legislation, as the best way forward. In this context, they agree to carry out simultaneously, in July 2024, one year earlier than the foreseen schedule, a binding market test for capacity allocation at their respective interconnection points, according to the CAM Regulation (EU) of the European Commission. Then, based on user interest, they will identify and size the most appropriate and targeted capacity expansion projects needed to meet demand along the Vertical Corridor route.

The Minister of Environment and Energy, Mr. Theodoros Skylakakis, stated: "The signing of the Memorandum of Understanding for the Vertical Corridor, in which the Operators of Slovakia (EUSTREAM), Moldova (Vestmoldtransgaz) and Ukraine (GTSOU) are now participating is a very important step towards strengthening the security of energy supply of the wider region, while at the same time giving to our country the possibility for further alternative energy supply sources. In an era of intense geopolitical uncertainties, the above development is extremely positive."

On the occasion of the signing, the CEO of DESFA, Maria Rita Galli, stated: "With today's signing of the Memorandum of Understanding, the operators of Slovakia, Moldova, and Ukraine are joining forces with joining forces with DESFA and the rest of the region’s operators to realize the vision of creating a 'Vertical Corridor' for the transmission of natural gas from Greece to Ukraine in the North and Hungary and Slovakia in the West. In today's ever-changing energy landscape, working together to strengthen and increase the flexibility of the regional gas systems, has emerged as a top priority. The coordinated development of the systems and interconnection capabilities of the countries participating in the 'Vertical Corridor' initiative will significantly contribute to strengthening the security of supply and storage capabilities of all countries, further diversifying sources of supply, and enabling the overall optimization of their infrastructures. We are fully committed to continuing working together with our partners to accelerate the interconnection of the region's natural gas markets, thereby strengthening the long-term security of supply, not only for the region but for Europe as a whole."

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