Switzerland-based MET Group strives to become a global integrated energy company with a footprint across Europe, Asia and the US, its chief executive Benjamin Lakatos told Argus.
MET dreamed of entering the LNG market for 16-17 years but knew that it had to "grow up" first, its chief executive Benjamin Lakatos told Argus on the sidelines of the Gastech conference in Houston last week. The firm now has a sufficient size to take on fob contracts, Lakatos said — it signed its first long-term deal for US LNG on a fob basis in July. MET's revenue was nearly €25bn ($28bn) in 2023.
The firm has already been buying spot LNG for 4-5 years. It has long-term regasification capacity in Germany, Spain and Croatia, and unloaded LNG in eight countries last year.
MET is now setting its sights on the Asian market, where it is looking to start both gas sales and gas supply sourcing through its subsidiary in Singapore that opened last year. It is also looking for additional potential US LNG supply. "But we don't want to do it too fast," Lakatos said.
Lakatos did not exclude the possibility of getting involved in the upstream sector as well. Owning upstream assets and having fixed costs "is a kind of insurance against market de-efficiencies", Lakatos said — by which he means "too big" price differentials, for example between Europe and the US.
In the medium term, firms can only stay competitive in LNG if they are involved "in all three key regions — Asia, US sourcing, Europe", Lakatos said. "We need to play this optimisation between the three territories." A large part of the value in selling LNG will start to shift between continents, he said. But while this strategy is "easy to execute and understand" for the largest global companies, it is more challenging for smaller ones such as MET, Lakatos said.
Lakatos said that although he would like to see a convergence of global gas prices over time, the market's structure is too segmented to allow this. Today, only a few companies are involved in the whole US LNG value chain, from extracting the gas, to liquefying it, shipping it and then regasifying the supply and selling it to Europe. "Everyone has his own home currency or price reference, everyone is asking for relatively big risk securities."
MET's number one priority within Europe for the next five years is growing its sales in the retail sector, Lakatos said. The firm is starting to push higher retail sales in France. It will also restart in Germany and is targeting higher sales in Italy and Spain too. The MET head described his firm's trading style as "a little bit opportunistic", with traders taking advantage of changing price differentials.
MET is also interested in the Baltics because it believes that the region is undervalued by international investors owing to the geopolitical situation, Lakatos said. "Investors do not consider the very stabilising factors such as the EU and Nato membership of these countries, or the euro currency." One of the business areas MET will be looking at in the Baltics is fertilisers.
Expanding into fertilisers
MET is trying to expand its value chain into the European fertilisers sector, in view of declining European gas consumption, as it strives to stay competitive.
Lakatos said he is concerned that Europe will soon become heavily dependent on imports of fertiliser, just as it is on gas imports. Without support, the heavily gas-intensive European fertiliser industry will continue to struggle because of high gas prices, Lakatos said.
MET is working on a new product for fertiliser companies, in which it would have the option of supplying either ammonia or natural gas, as both can be used to run the plants. The firm has spoken to potential suppliers but it will take 1-2 years to build up its expertise, Lakatos said.
