Western Balkans Weigh U.S. LNG Expansion Against EU Decarbonisation Goals

The Western Balkans are expanding access to alternative gas supplies as governments seek to reduce dependence on Russian energy, while EU institutions scrutinise whether new gas infrastructure could prolong fossil-fuel consumption. Albania, Bosnia and Herzegovina, Serbia and North Macedonia are pursuing or considering infrastructure that could increase access to U.S. liquefied natural gas through Greece and Croatia.

Regional governments argue that gas can support the transition away from coal while renewable generation expands. EU officials, however, are increasingly concerned that new pipelines, LNG terminals and gas-fired power plants could create additional gas demand at a time when candidate countries are expected to align with the bloc’s long-term climate objectives. The issue therefore combines supply diversification with questions over the long-term utilisation and economics of new energy infrastructure.

Serbia expands alternative gas routes

Serbia is among the countries most directly affected by the issue. Belgrade already has a gas interconnector with Bulgaria, providing access to Azerbaijani gas and potentially LNG imported through Greece, while another connection toward North Macedonia is being prepared.

The country is also expanding its domestic transmission network through a World Bank-backed infrastructure programme centred on the Trupale–Pojate pipeline. The project is intended to transport additional gas entering Serbia from southern routes deeper into the domestic system. For Serbia, alternative supply routes are linked to energy security as the country remains heavily dependent on Russian gas and seeks additional options for future supply arrangements.

U.S. LNG delivered through Greek terminals could form part of that supply mix. The commercial issue is whether such infrastructure primarily replaces Russian volumes or contributes to a substantial increase in Serbian gas consumption. That distinction is becoming increasingly relevant to EU institutions and international lenders.

LNG infrastructure creates new regional connections

The United States has emerged as a major LNG supplier and is seeking additional long-term markets as European countries reduce their reliance on Russian pipeline gas. The Western Balkans provide potential demand because the region continues to rely heavily on coal, while some countries remain exposed to Russian gas routes or have limited diversification. U.S. officials argue that LNG can strengthen energy security, reduce dependence on Russia and support trade and economic development. Albania has moved toward long-term U.S. LNG supply, while Bosnia and Herzegovina is pursuing its southern gas connection toward Croatia and access to the Krk LNG terminal.

Serbia and North Macedonia are also developing routes that would improve access to LNG entering southeastern Europe through Greece. The resulting regional infrastructure network could increase the importance of Alexandroupoulis, Revithoussa and Krk as alternative supply points alongside established Russian pipeline routes.

Gas remains part of coal-to-renewables transition

Governments across the region maintain that the energy transition cannot rely exclusively on renewable generation. The Western Balkans remain heavily dependent on coal for electricity production, while drought conditions can reduce the reliability of hydropower. Solar and wind generation can replace part of coal output but remain variable. Gas-fired power plants can provide electricity relatively quickly when renewable production is low, making gas an option for system flexibility during the transition.

For Serbia, this consideration is linked to planned additions of wind and solar capacity alongside continued dependence on lignite.

New gas-fired generation could provide additional flexibility as renewable capacity expands. Other technologies can perform similar functions, including battery storage, pumped-storage hydropower, stronger electricity interconnections and demand-side flexibility. Serbia is pursuing investments in several of these areas.

Project economics depend on future utilisation

The debate surrounding new gas infrastructure also has a financial dimension. Pipelines and gas-fired power plants generally require substantial utilisation over long periods to support their investment economics. Faster-than-expected reductions in gas consumption resulting from EU climate policy could lower utilisation and create the risk of economically stranded infrastructure.

Conversely, slower coal retirement and difficulties integrating renewable generation could leave countries with insufficient flexible generation and greater exposure to electricity shortages or costly imports. These risks affect the assumptions underpinning new infrastructure investments. The economic profile of a pipeline capable of allowing several suppliers to compete for existing demand differs from that of infrastructure whose viability depends on substantially increasing national gas consumption. For Serbia, the distinction is relevant to the future development of its gas network and related energy investments.

Southern Interconnection under scrutiny in Bosnia

Bosnia and Herzegovina provides another example of the infrastructure and market-access debate. The proposed Southern Interconnection would enable Bosnia and Herzegovina to import gas from Croatia and potentially LNG supplied through the Krk LNG terminal, reducing reliance on its existing Russian supply route. The project has also prompted discussions over its operating model and the participation of different companies.

EU and Energy Community officials have stressed that new gas infrastructure should follow principles of competition, transparency and equal market access, rather than establishing privileged positions for individual suppliers or operators. The same principles have wider relevance as gas infrastructure expands across the Western Balkans. EU institutions do not determine whether countries in the region can purchase U.S. gas, but EU accession candidates are expected to progressively align their market structures, competition frameworks and decarbonisation policies with EU requirements.

EU LNG demand adds another dimension

The European Union itself continues to rely on imported gas and significantly increased purchases of U.S. LNG after Russian pipeline deliveries declined. The bloc produces relatively little domestic gas and remains dependent on external supplies. This creates a point of discussion for Western Balkan governments, which can question why LNG infrastructure remains part of the energy-security framework for EU member states while comparable investments in candidate countries face greater scrutiny.

The distinction increasingly concerns the scale, utilisation and duration of infrastructure investments. European LNG infrastructure is viewed in the source material as supporting supply security during a transition toward lower gas consumption. The concern for the Western Balkans is that new infrastructure could instead establish substantial additional gas demand while EU-wide consumption is declining. Future consumption assumptions and investment timing are therefore central to the economic assessment of new projects.

Serbia develops multiple supply options

For Serbia, the emerging gas strategy involves more than choosing between Russian pipeline gas and U.S. LNG. The country’s infrastructure development is intended to create access to multiple sources, including Russian gas, Azerbaijani gas and LNG through Greece, alongside storage and regional interconnections.

A system in which alternative routes simply replace one dominant supplier with another would provide less diversification than one in which multiple sources can compete. The expansion of transmission infrastructure, storage and interconnections is therefore linked to Serbia’s ability to source gas according to price, availability and supply security, while managing the implications of future gas demand. Across the Western Balkans, the development of U.S. LNG access is consequently taking place alongside wider decisions over gas infrastructure, renewable generation, coal replacement and alignment with EU energy and climate policies.