Jaxon Caines, E&P and technology reporter, Hart Energy: I am Jaxon Caines with Hart Energy and we're here at Gastech 2024. I'm here with Benjamin Lakatos, chairman and CEO of MET Group and we're here to talk about Europe and what it's doing out here.

So can you just tell me a little bit about MET Group and what you guys are doing at Gastech?

Benjamin Lakatos, chairman and CEO, MET Group: Nice to meet you first of all. Thanks for the question what MET is doing here. So MET is a management-owned European gas and process company, having also trading angle of it and we also own assets in Europe. We are coming from the customer side, and we did realize that if we want to stay competitive on the European natural gas landscape, means we want to give the best price that offers to our clients.

We have to enter the LNG market as such... We are a middle-sized company in Europe. We had $24.5 billion revenue last year. With this, we are one of the biggest private players in the power and the gas sector, but we do not belong to the very big ones. I would say this with every size, with this size it's pretty challenging to enter in the LNG trading or activities because that's really the big guys club but we don't have any other choice. If we want to give the best service, the best contracts to our clients in Europe, we have to enter to the LNG markets. And then, we [have been] working on this since several years, slowly or at least trying to understand, and we signed our first mid-term FOB contract which we just published recently and we are basically trying to enter the value chain into both directions. One of our assumptions is that mid-term is going to be extremely important to be involved not only in the European LNG markets but the U.S. and also the Asian LNG activities. We believe that in mid-term, nobody can stay competitive if somebody is not involved in industry, but this cannot happen within years. So step by step we are trying to take new positions supporting our European clients. We are a European company mainly and slowly reaching to the U.S. and Asia.

JC: Okay. Now as you said, you guys, your company is based in Europe, but we're out in the U.S. at Gastech. So can you sort of talk about the importance of U.S. LNG to Europe and its significance?

BL: In 2022 there was a big natural gas crisis in Europe, prices increased 20-fold and the whole European natural gas community was shocked whether we'll have supply security or not. And that's a meaningful question in Europe. Back in 2022 for some cities or countries, that was a real question—whether they can heat in the homes during the winter—and the U.S. was exporting before 2022 around 200 cargoes, in some years less in the latest slightly more. And then 200 LNG ship cargo per year into Europe at this number jumped close to 700 in 2022 and reached some more than 700 in 2023. This huge swing was extremely important to Europe and I can recall that during this crisis the whole industry believed that ... needs three years at least until we can restructure physically and also financially the European natural gas markets in a way that this significant additional volume could arrive from the energy markets. That meant new regas capacities had to be built in Europe and also new interconnections.

New compressors [were] needed in the system in such way I think the European natural gas technical industry did a miracle. That's many other companies, not us. So it's very fair if I say this to them because this transition happened within a year. Everybody was the best, most optimistic guesses were three years and basically the industry managed the full transition within a year. By now if Europe would finish the construction of the ongoing regas terminals, I believe that the EU is ready from a natural gas infrastructure perspective. We are also very proud to be part of one of the German terminals. We are a long-term capacity booker of one of that terminals [that] is unique because that's the only German new LNG terminal which don't have taxpayers money in it. So it's our money was doing that job and [by this] we also contributed to the transition. And since we have these long-term regas capacities in Germany, but we have also in Spain and in Croatia, obviously we are looking for sources. That's why we came to the U.S. to buy LNG to our European portfolios.

JC: Now how important is LNG to the energy transition as a whole and how has MET helping support that shift?

BL: So I can speak from a Europe, I would speak first from a European perspective and that's my main understanding, and I will give you things from a global perspective. So we at MET Group believe that the energy transition, though we wish to see this very fast in Europe, it's going to take slightly longer than most of the stakeholders believe as of today. That means that we expect that the transition away from natural gas in Europe could take at least 10, 15 years longer than people assume today. I mean the mainstream assumption is 2040, maybe between 2030 or [2050]. I think wherever this date exists is going to be 10, 15 years longer. We do not expect that the natural gas consumption of Europe will grow. No, it's going to decrease like it's already started in the previous year years. The overall gas consumption in Europe is decreasing, but we have an existing infrastructure in place.

It would be foolish not to use that infrastructure, and this cannot happen within one day. One big difference that the green transition is almost like a religion by now in Europe, and we support this very much. MET is a very young company and we are one of the driving force in this. We are not a big corporate in this game, but proportionally we put 70% of our capex into renewable investments, which is a very, very high proportion if you would compare whatever. So we are very proud of that, that we are definitely contributing into the green transition with our renewable investments and we are also investing in Europe a lot into battery storages. But LNG and natural gas is going to play a pretty long, very important role in this game. Without that, there will be no electricity time to time and it's so simple that if we are not ready to give up supply security on natural gas and on the power, we need natural gas as a transition cure.

I think if you zoom out from Europe, the situation is different. I mean natural gas industry still could and should grow in Asia and other parts of the world. So I expect that the natural gas industry will still step up and grow globally, not in Europe as I mentioned, but globally there will be a further increase in the natural gas consumption. One statistic we [would] like to share, I mean that's also my personal phrase because I know my corporates are hitting the problem where we don't know the solution. And I always tell to my people, "Hey guys, let's focus on the low-hanging fruit." and That's my suggestion also for the green transition as well because the whole green transition, at least for me, looks a little chaotic. It's a little bit unclear. So many agendas, policies. This is good that this is happening because now we talk about that and many people are doing thier part, but probably the low-hanging fruit in this green transition is to replace the coal-fired power plants with natural gas.

That's a huge amount from a potential consumption perspective from the natural gas and that's a huge CO2 cut, could be. This is only a natural gas or an energy expert review what I'm saying, so these do not take fully into account other geopolitical considerations and competitiveness, but purely from an emission perspective, we believe that and, that's not our data, that's according to international organizations, this could be reduced by 20%. If we would replace all the coal fired power plants by gas fired power plants, that would reduce by 20% the overall CO2 emission globally. And I'm not saying this all should happen, but at least I think this is the next step to focus on. And I strongly believe that natural gas should play a transition fuel.

Really funny in Europe, natural gas [as a] transition fuel’s role is a question mark, and that's whether [it] should be at all. I think globally the question is the opposite. Whether the natural gas is going to be only a transition fuel or is a standalone growth story alone, I see globally upward trend for natural gas. In Europe, I see a downward trend. That's the second reason why we are also trying to move into the global LNG from our side.

JC: So to focus specifically on MET, what are some new innovations or projects you guys are working on?

BL: Once you are in our size? It's very, very difficult to be technologically innovative. What we did from our side that I make sure that whenever the new innovations are coming, that we are one of the fastest adoption. We are present in many, many European countries. So if we see a good idea here, we are one of the fastest who are bringing this good idea somewhere. But one of the commercial new idea or structural new idea, which we pushed forward, is we call it cluster-based green power generation. One of the problems in Europe now that people are producing wind or solar on one single location, and the demand is not happening in the same moment when the production, and there are gaps. So there is a need for storage and that storage is not fully solved, it's an ongoing competition [on] whether battery storage, gas-fired power plants, hydrogen or new technologies will play this role.

And our reaction to that, that we are trying to secure grid access and we are trying to put into a physical vicinity, different technologies. Like one example, we buy an old power plant where there is gas-based power generation and then we put renewables next to it. We do put battery storage next to it. So we are combining very, very different technologies. That's also kind of reflection on our future view. That's a European view only, but we believe that the long-term future is power-based, so we believe gas is a transition fuel and also oil is going to phase out, not in 2030, but in 50 or 100 years I think we are going to be fully power-based and this power has to be produced locally. So we don't believe in any single technology. We believe there is no such a silver bullet across the industry, but every local community should find what's the best green solution for themself. And in somewhere we have wins some where we have hydro opportunities, GOE, the many, many new technologies are also coming. That's a very interesting competition by the way.

JC: Okay, well Benjamin, it was a pleasure to meet, a pleasure to speak to you.

BL: It's my pleasure, thank you.

JC: And that's a wrap for this interview. To find out more about MET Group, go to www.hartenergy.com.

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