South East Europe’s energy transition is often framed as a renewables story. That is correct, but incomplete. The region is also an energy-security market, and gas still plays a major role in that story.
The reason is flexibility. Solar and wind are growing, but they do not always produce when the system needs power most. Hydro is valuable, but weather-dependent. Coal remains important in parts of the Western Balkans, but its economics and environmental position are weakening. Batteries are growing, but they mostly solve short-duration flexibility. Gas remains one of the tools available for balancing, security of supply and coal displacement.
Romania’s Neptun Deep project is the largest regional example. OMV Petrom and Romgaz are developing the Black Sea project on a 50/50 basis, with development investment of up to €4 billion and first gas expected in 2027. OMV Petrom has described Neptun Deep as involving around €4 billion of investment and expected annual production of around 8 billion cubic meters of natural gas.
This is not only a Romanian project. It has regional implications. Additional Romanian gas can support supply diversification in Central and South East Europe, reduce dependence on more geopolitically exposed sources and strengthen Romania’s role as a regional energy exporter.
The Alexandroupolis LNG terminal is the second major pillar. The FSRU has regasification capacity of up to 5.5 bcm per year and is designed to serve Greece and regional markets including Bulgaria, Romania, Serbia, North Macedonia, Moldova, Ukraine, Hungary and Slovakia.
Greece’s LNG position matters because it turns the country into a gas gateway for the Balkans. When combined with interconnectors, reverse-flow capacity and the Vertical Corridor concept, LNG infrastructure can reshape regional gas flows.
This creates an important investment conclusion: gas infrastructure in SEE should not be viewed only through the lens of long-term fossil-fuel demand. It should be evaluated as flexibility and security infrastructure.
That does not mean all gas assets are attractive. Baseload gas generation exposed to volatile fuel prices and carbon costs can be risky. But flexible gas-fired capacity, LNG access, storage, interconnectors and gas-to-power assets that support system reliability may remain strategically relevant.
The strongest gas-related assets will have at least one of four characteristics.
First, they improve diversification. Infrastructure that allows countries to access multiple sources of gas has security value.
Second, they support coal displacement. In coal-heavy markets, gas can reduce emissions if used to replace older lignite assets, especially when paired with renewables.
Third, they provide flexibility. Fast-ramping gas plants can help balance evening demand when solar drops.
Fourth, they have regional optionality. Assets connected to multiple markets can capture value from price spreads and security-of-supply needs.
But gas investment also carries risks. EU climate policy, carbon pricing, methane regulation, utilization uncertainty and competition from storage can all affect long-term economics. Projects must therefore be designed for flexibility, not stranded baseload.
The financing market understands this distinction. Neptun Deep is strategic because it is domestic/regional production at scale. Alexandroupolis is strategic because it diversifies supply routes. Flexible power assets may be financeable where capacity adequacy or system reliability is clearly valued. But purely speculative gas demand growth is harder to underwrite.
The interaction with renewables is also important. A power system with high solar penetration needs flexible evening capacity. Batteries can cover part of that need. Hydro can help where water is available. Demand response can reduce peaks. But during longer stress periods, gas may still be required.
This is why SEE transition finance is not a simple renewables-versus-gas debate. The real question is which assets make the system more secure while allowing coal and emissions to decline.
Gas will not be the dominant growth story forever. But in the 2026–2028 investment window, it remains part of the flexibility stack.
For investors, the best approach is selective. Avoid gas assets dependent on high baseload utilization for decades. Focus instead on assets with security value, optionality, flexibility and transition compatibility.
South East Europe needs renewables. It also needs a system that works when renewables are not producing enough. That is why molecules still matter.
