Switzerland-based MET Group is looking to considerably expand its LNG portfolio, building on its current capacity, as it seeks to strengthen its foothold in the European energy market. Gyorgy Vargha, CEO of MET International, shared these ambitions in a recent interview with NGW, where he talked about the importance of growing the company’s LNG presence in response to increasing market demand.
Source: Natural Gas World
MET Group has been proactive in securing long-term LNG supply agreements, which are critical for its growth strategy. Last year, the company signed a 20-year Heads of Agreement with US-based Commonwealth LNG for 1mn tonnes/year of LNG. More recently, in July 2024, MET entered into a 10-year free-on-board deal with Shell to purchase US LNG, behind its European customer base. Alongside bolstering security of supply for MET’s customers, this flexible LNG supply enables its diversification ambitions, allowing the company to extend its geographical scope to new regions such as Asia.
These deals reflect MET Group’s strategy of securing diverse and long-term supply sources to meet Europe’s growing demand for LNG, as the region looks to enhance its energy security and reduce its reliance on traditional fossil fuels.
MET Group also holds long-term regasification capacity in Germany, Croatia, and Spain, and has delivered LNG cargoes to eight European countries in recent years, including Greece, Italy, the UK, Belgium and Finland. In 2023 alone, MET delivered more than 30 LNG cargoes to the continent. As its LNG business activities expand, Vargha expects the company’s regasification volumes to increase in tandem – in line with European LNG import needs.
The company focuses on optimising its LNG imports from various sources in particular in America and Africa, including the US, Algeria and Nigeria. “We’ve been importing from a number of different supply sources. We do not focus on specific supply sources. Our focus is to maintain and optimise our LNG import,” Vargha explained.
Vargha also highlighted the crucial role that LNG plays in Europe’s energy mix, especially as the continent continues to transition away from coal and other high-emission energy sources. “LNG is the most interesting import fuel into the European energy mix,” he said. Vargha argued that any integrated energy company that is not active in LNG trading risks being out of touch with the key drivers of Europe’s energy market, whether from a sales, trading, or asset investment perspective.
LNG demand in Europe will be determined by the weather
While MET Group’s LNG expansion plans are ambitious, Vargha noted that European LNG imports in 2023 have been slower than last year due to a combination of factors, including weaker industrial demand and unusually warm weather.
"The European LNG imports have been substantially lower this year so far simply because the demand was not there,” he said. Vargha explained that Europe entered the summer with gas storage levels around 55-58%, leaving less room for LNG imports during the warmer months.
Looking ahead, Vargha said the amount of LNG Europe will import this year will largely depend on the weather, especially during the winter months. "If there's going to be a normal cold weather over this winter, so not as warm as over the last two to three years, then substantially higher LNG imports are going to be required in order to balance the European gas markets or to come up to this 40-45% storage level that will keep the market comfortably balanced,” he said.
MET Group Asian business as a key pillar for the company’s expansion
Beyond Europe, MET Group is gradually expanding its presence in Asia. In 2023, the company established an office in Singapore to focus on LNG trading and asset investments in the region. MET Asia, a subsidiary owned 90% by MET Group and 10% by Singapore’s listed company Keppel Infrastructure, who is also a 10% shareholder of the Group as a whole, aims to grow MET’s LNG portfolio beyond Europe and tap into the rapidly growing Asian energy market.
“We opened an office and we’re growing steadily in this. LNG is a market where there’s always something happening,” Vargha said.
Vargha believes Asia, led by China and India, will be a key driver of global energy demand in the coming years, with significant opportunities for switching from coal to natural gas. “There’s a tremendous place for Indian and Chinese natural gas usage growth, which can be LNG,” he said.
Natural gas will have a role to play in energy transition
Finally, Vargha underscored the continued importance of natural gas in the global energy transition, now that renewable energy sources like solar and wind gain traction. He argued that natural gas remains a vital bridge fuel due to its flexibility and cost-effectiveness compared to renewable projects.
MET Group clearly believes that natural gas will continue to play an important role in the energy mix – it will remain as an essential energy source in Europe for the foreseeable future. The growing amount of solar and wind energy being installed into the grid makes matching the supply and demand of energy more challenging, and – as long as batteries remain uneconomical on a large scale – natural gas remains the main provider of the necessary flexibility.
“Natural gas supports the coal-to-gas transition and backs up weather-dependent, intermittent renewable sources,” Vargha said.
While MET Group is actively investing in solar power, Vargha stressed that natural gas will continue to play a crucial role in the energy transition for the foreseeable future, particularly in regions where coal remains a dominant energy source. "We firmly believe in solar and wind, but natural gas offers an attractive bridge fuel in the years to come compared to other fossil fuels,” he concluded.