The Swiss company MET has been active in Germany for a good three years through its subsidiary MET Germany. The launch was successful and the company wants to continue to grow, emphasises CEO Jörg Selbach-Röntgen in an interview with energate. Although organic growth has priority, acquisitions have not been ruled out.
Source: Energate Messenger
energate: Mr Selbach-Röntgen, the CEO of MET Group, Benjamin Lakatos, announced in an interview with energate that your company wants to grow in Germany and is also focusing on investments and takeovers. What is your strategy?
Selbach-Röntgen: In principle, we are focusing on sustainable, stable growth and a solid position on the German market. Since entering the market just over three years ago, we have made a successful start despite coronavirus and the energy crisis; we are profitable and the appetite is there. Due to the increased risks that need to be reassessed, there are no longer many companies willing to inject liquidity into the market or supply additional large industrial customers. It is not yet possible to say exactly to what extent takeovers will actually take place. Economically, we are in a position to do this, but it also has to be right.
energate: You have taken over Gas-Union’s storage business. Are you interested in other storage operators or are you more interested in other areas?
Selbach-Röntgen: For us as a group, it's about everything from assets to companies, parts of companies or even portfolios. Firstly, however, we need to continue to drive organic growth and significantly expand our market position.
energate: What are your current gas sales volumes in Germany?
Selbach-Röntgen: We are in the double-digit TWh range. In terms of potential, that is still far behind what we are capable of, although that is also difficult to define. Before MET Germany was even founded, MET Group was already active on the trading side in Germany and supplied counterparties. Together with our trading floor in Switzerland, we are constantly developing our strategy, product and delivery concepts and acquiring new customers across all segments.
energate: Do you also have co-operations with municipal utilities?
Selbach-Röntgen: We are in close contact with almost all major municipal utilities and are constantly gaining new ones. Whether as a pure trading partner, as a service provider, e.g. in the area of balancing group pooling, where numerous municipal utilities are already customers, or as a main supplier that helps with the procurement strategy or, as is currently the case again, increasingly involved in discussions about flexibility. We feel very close to the municipal utilities and want to and will continue to grow here.
energate: Does that mean we will no longer have the full supply contract?
Selbach-Röntgen: Full supply is a matter of definition. If full supply means a flexibility of 70 to 130 on a fixed quantity, as was quite common a few years ago, then I don't think that will happen again. There are minimal tolerance bands currently available to buy on the market at enormous premiums and I personally believe that customers are better advised to seek support elsewhere, for example in portfolio management and in structuring their risks. Ultimately, there are considerable risks that every wholesaler and supplier has to take. Not every market participant is prepared to do this.
energate: Does this mean that small companies still get flexibility and the larger ones don't?
Selbach-Röntgen: No, it doesn’t matter whether they are small, medium or large. If you now supply 10 or 20 small customers and give them each the tolerance band, then that is also a cluster risk. All the colleagues I talk to about the supposed renaissance of tolerance bands give me enormous scepticism as feedback. I think the expertise and resources for portfolio management and risk management at many municipal utilities could simply be expanded. You have to offer support, but that also requires openness.
energate: You say that balancing group pooling will grow. After GABi Gas 2.0, however, the models have lost a lot of their appeal.
Selbach-Röntgen: I would disagree with that. As a team, we have extensive experience in the area of pooling and we successfully managed one of the largest balancing group pools in Germany before MET Germany was launched. Many of our customers still know us from back then and there are some large companies that we are currently talking to about them joining us. It is a thematically logical addition to our range of services and means an economically interesting prospect for both sides, otherwise we wouldn't be doing it.
energate: The unfortunate issue of LNG, where no contracts have yet been signed with potential customers, what are you doing now?
Selbach-Röntgen: It is absolutely undisputed that the German market would benefit from more long-term purchase agreements for LNG from large industrial customers and municipal utilities. We are still in talks, but progress is not as fast as we think it should be for the market as a whole.
energate: What's the problem then?
Selbach-Röntgen: Prices have cooled and this means that it is no longer as easy to conclude long-term contracts on the market. Above all, it is those who understand diversification and risk management who talk to us. Anyone who was looking for a quick price effect last year is out. Perhaps that's for the best; we've always seen it as stabilisation for the market, so I'm not happy that we're seeing so little LNG.
The current price level belies the fact that Germany is linked to a global market for LNG. If demand now picks up in Asia, for example, and we don't have enough long-term contracts in Germany, then this will have a price effect and volatility will immediately return, and then we as a business location will have to ask ourselves how competitive we can be.
energate: Critics speak of overcapacity at the import terminals. How do you see it?
Selbach-Röntgen: I am glad that we have the infrastructure and believe that this debate about stranded assets and over-investment is a false one. The economic damage to our country and our neighbours would be disproportionately greater than the investment in infrastructure in the event of high volatility.
A few figures to illustrate this: Nord Stream 1 had a capacity of 55 billion cubic metres (150 million cubic metres/day) and with the planned commissioning of Nord Stream 2, the capacity would have doubled to 110 billion cubic metres per year. The existing regasification capacities in Germany will amount to around 31 billion cubic metres at the end of 2024, which corresponds to around 28 percent of the two Nord Stream pipelines. It must be borne in mind that, in addition to Germany, landlocked countries such as Czechia, Slovakia and Switzerland also benefit from the existing regasification capacities on the German coasts – these represent a fundamental means of risk management for several countries.
The interview was conducted by Michaela Tix and Thorsten Czechanowsky.