US-Backed LNG Projects Reshape the Western Balkans’ Energy Landscape

The United States is seeking to reshape the energy map of the Western Balkans through a network of bilateral agreements and infrastructure projects centered on liquefied natural gas (LNG). The broader objective is to reduce the region’s dependence on Russian gas while strengthening a strategic energy corridor linking Southern and Central Europe.

A series of projects is being advanced across Croatia, Bosnia and Herzegovina, North Macedonia, Albania, Montenegro, Kosovo and Serbia. These initiatives include new gas pipelines, LNG terminals and gas-fired power plants, supported politically and financially by both Washington and Brussels. Some projects are already under construction or in the contracting stage, while others remain in planning. Together, they signal a gradual shift in the region’s energy mix toward gas supplies from the United States, Azerbaijan and the Mediterranean basin.

Jonathan Stern of the Oxford Institute for Energy Studies notes that Southeast Europe has already developed alternative gas supply routes. These include LNG terminals in Greece and Croatia, the Southern Gas Corridor from Azerbaijan, and Romania’s Neptun Deep offshore field in the Black Sea, whose exploitation is expected to begin next year and whose reserves are estimated at around 100 billion cubic meters.

Bosnia and Herzegovina Seeks to End Dependence on Russian Gas

Bosnia and Herzegovina has recently become a focal point of regional gas diversification efforts through the Southern Gas Interconnection project with Croatia. The pipeline would give the Federation of Bosnia and Herzegovina access to the LNG terminal on the Croatian island of Krk and to alternative gas suppliers. At the same time, Republika Srpska continues to pursue separate gas links with Serbia, including the Eastern Interconnection project from Bijeljina to Banja Luka.

For nearly five decades, Bosnia and Herzegovina has depended almost entirely on Russian gas, delivered through TurkStream and used mainly for heating in Sarajevo. In overall volume terms, the country remains a relatively small gas consumer compared with Serbia.

The intergovernmental agreement between Bosnia and Herzegovina and Croatia on the Southern Gas Interconnection was signed in Dubrovnik in April, in the presence of US Secretary of Energy Chris Wright. The pipeline is planned to extend from Dalmatia toward central Bosnia, with additional branches toward Herzegovina and the country’s northwest. Croatia’s state-owned Plinacro is leading the Croatian section, while the US-based company AAFS Infrastructure and Energy has been designated to manage the project on the Bosnian side.

The project has, however, drawn criticism from the European Commission and the Energy Community. Concerns center on the Federation of Bosnia and Herzegovina’s special-purpose law, or lex specialis, which named a private American company in the project framework, as well as questions over compliance with EU and Energy Community rules.

Bosnia and Herzegovina currently consumes up to 250 million cubic meters of gas annually, while the planned pipeline is expected to have a capacity of around 1.5 billion cubic meters. This has prompted discussion about the possible construction of gas-fired power plants capable of supplying electricity to roughly 400,000 households. At present, about 80% of the country’s electricity is generated by coal-fired thermal power plants, some of them more than half a century old.

The new pipeline would also connect with the existing gas route arriving from Serbia. Still, Stern argues that while the project is important for Bosnia and Herzegovina, its wider regional relevance is less clear. He also questions the commercial viability of an investment estimated at around EUR 1 billion, particularly given the lack of available LNG transit capacity from Croatia and Serbia’s expanding access to gas through Bulgaria.

Serbia Balances Diversification and Russian Gas Dependence

Serbia is expanding its gas infrastructure as it seeks to preserve its position as a regional energy hub while creating room for US LNG and broader Western investment in the sector.

In February this year, Serbian Minister of Mining and Energy Dubravka Đedović Handanović signed a joint statement with the United States and several Central and Eastern European countries during the Transatlantic Gas Security Summit in Washington. The statement focused on strengthening the resilience of regional gas markets and improving supply security.

Following the summit, Srbijagas Director Dušan Bajatović stated that Serbia would eventually need to purchase American gas, although no quantities or formal supply contracts have yet been defined. Serbia’s 2024 strategic energy cooperation agreement with the United States envisages diversification of energy sources, but it does not currently include a binding agreement to buy US LNG.

Potential US LNG deliveries to Serbia could come through the Krk terminal in Croatia or via Greece’s Alexandroupolis terminal, supported by new interconnections through Bulgaria and North Macedonia. Serbia currently operates approximately 2,500 kilometers of gas pipelines, is planning new links, including one toward North Macedonia, and is expanding the Banatski Dvor gas storage facility.

Despite these diversification efforts, more than 80% of Serbia’s gas still comes from Russia through TurkStream. Major energy assets, including the TE-TO Pančevo combined heat and power plant, remain tied to Russian-linked structures involving Gazprom and the Serbian oil company NIS.

Montenegro Explores an LNG Terminal and Gas-Fired Generation

Montenegro, which currently lacks a domestic gas network, is also being drawn into the emerging US-backed LNG framework. Plans include an LNG terminal at the Port of Bar and the possible development of gas-fired power generation.

The country participated in the Transatlantic Gas Security Summit in Washington in February and joined a broader political statement on gas cooperation between the United States and several Central and Southern European countries.

In 2023, the Montenegrin government signed a memorandum of understanding with US companies Enerflex Energy Systems and Wethington Energy Innovation regarding potential LNG and power infrastructure. However, no LNG supply agreement has been finalized, no volumes have been specified, and no binding commercial contracts have been signed.

Montenegro has also supported the Ionian-Adriatic Pipeline (IAP), which would connect the Trans-Adriatic Pipeline (TAP) in Albania with Croatia, although the project remains at the conceptual stage. Separately, gas-fired power plants ranging from 50 MW to 400 MW are being considered in Bar, Podgorica and Pljevlja, including hybrid solutions and possible conversions of existing facilities.

Studies prepared for the Electric Power Company of Montenegro by Japan’s JERA and Switzerland’s SS&A Power Consultancy concluded that the options assessed are technically feasible and economically viable. Depending on the selected plant capacity and fuel supply source, estimated investments range from EUR 233 million to EUR 362 million.

Kosovo Remains Outside the Current Gas Push

Kosovo currently has no gas infrastructure and relies almost entirely on coal-fired power generation. A proposed gas interconnection with North Macedonia had been included in the European Union’s investment plan for the Western Balkans, but the project was suspended, with the government citing high costs and a strategic preference for renewable energy development.

The proposed pipeline would have provided Kosovo with access to gas from Greek LNG terminals in the Aegean Sea, while a separate link to Albania had also been considered. US officials have indicated that they remain open to supporting commercial cooperation if market conditions become more favorable.

Kosovo also declined to direct roughly USD 200 million in Millennium Challenge Corporation funding toward gas infrastructure, instead shifting the investment toward battery energy storage systems.

North Macedonia Emerges as a Strategic Southern Corridor Link

North Macedonia is building new gas infrastructure with support from Washington and Brussels, aiming to reduce its long-standing dependence on Russian gas and position itself as a regional energy transit hub. As a NATO member and EU candidate country, diversification of energy supply has also taken on a clear geopolitical dimension.

The TE-TO Skopje cogeneration plant, which provides heat to the capital and produces electricity, remains dependent on Russian gas and is controlled by interests linked to the Russian group Sintez.

Skopje has signed a memorandum related to the purchase of US LNG, though detailed commercial terms have not been publicly disclosed. The Gevgelija–Negotino gas pipeline is under construction and is expected to connect North Macedonia with Greek LNG terminals. Its initial annual capacity is planned at 1.5 billion cubic meters.

The European Union is financing the project through a combination of loans and grants. At the same time, an interconnection with Serbia is being planned, with construction expected to begin in 2027. North Macedonia’s Ministry of Energy, Mining and Mineral Resources has also stated that the country plans to develop 67 new energy facilities with a combined installed capacity of 4,416 MW, including a cogeneration plant near Negotino.

Albania Positions Vlora as a Future LNG Hub

In April 2026, Albania signed a strategic agreement worth USD 6 billion involving Venture Global and Aktor LNG USA for long-term LNG supply beginning in 2030. The agreement is part of a broader effort to turn Albania into a regional entry point for US LNG in Southeast Europe.

The plan includes the development of an energy hub in Vlora featuring an LNG terminal and a gas-fired power plant with a capacity of approximately 380 MW. The project would also connect with the Trans-Adriatic Pipeline (TAP), which has transported Azerbaijani gas to Italy since 2020.

Vlore, Albania

Washington views Albania as a potential distribution platform for supplying US gas to Kosovo, North Macedonia and other Western Balkan markets. This is particularly significant because Albania does not currently operate a functional internal gas network, while most of the infrastructure inherited from the socialist period is no longer usable.

For Albania, whose electricity system depends overwhelmingly on hydropower, a gas-fired power plant could serve as a strategic reserve during drought periods and times of rising power demand.

Energy expert Stavri Dhima has argued that Albania’s gasification strategy should combine several elements: construction of the Ionian-Adriatic Pipeline, connection to Croatia’s LNG terminal, access to the Trans-Adriatic Pipeline carrying Caspian gas, and development of an LNG terminal and gas storage facility in Dumrea.

If completed, the LNG terminal in Vlora could become a regional gas hub serving Albania, Montenegro, North Macedonia and Kosovo. Through IAP and TAP, gas could potentially also be directed toward Bosnia and Herzegovina and Italy.

Still, experts caution that infrastructure alone does not guarantee energy security. Countries seeking to reduce dependence on Russian gas must also secure reliable, long-term supply contracts with multiple alternative suppliers.