Swiss gas trader MET wants to pilot LNG tankers to Lubmin for municipal utilities and industrial customers. "We are currently in contact with many LNG producers from all over the world and are holding intensive discussions with our customers," said MET Germany CEO Jörg Selbach-Röntgen in an interview with energate.
Original article: energate messenger
If things go well, the first contracts could already be signed by the autumn. As energate has learned from the market, the majority of industrial companies in Germany currently prefer American LNG. Jörg Selbach-Röntgen commented: "This is probably due firstly to the stability of the region and secondly to the enduring trust in the Henry Hub as an index."
The Swiss company has been present in Frankfurt for two years, and in 2020 it also acquired parts of Gas-Union, including gas storage facilities. Its launch on the German gas market thus coincides with a time of upheaval. After the halt of Russian pipeline deliveries and the famous visit of German Economics Minister Robert Habeck to the Emir of Qatar, gas procurement is being reorganised. At the beginning of the year, MET Group had announced that it had secured capacity for Lubmin from the only private LNG terminal operator, Deutsche Regas. So far, there are no options at the five state-leased FSRUs, where RWE and Uniper as well as EnBW/VNG have exclusive access – for a limited period until March 2024.
10 to 40 percent LNG
On the customer side, MET has meanwhile amassed a number of larger municipal utilities and industrial companies that are keen to add 10 to a maximum of 40 percent LNG to their portfolios. The CEO put the total volume at 180 TWh. An average term of ten years is desired, in individual cases 12 to 13. The producers would prefer longer periods of up to 20 years. This means that there is still a lot of work ahead of Selbach-Röntgen and his team in order to achieve a good solution for both sides.
The gas market had actually said goodbye to such long-term contract commitments, which used to be completely normal in times of oil indices. Selbach-Röntgen, however, definitely sees advantages in the ability to plan. “Whilst there are no concluded contracts in Germany that go beyond short terms, we as a market will have the Asian market hanging over us like the Sword of Damocles,” he told energate. Currently, gas trading is indeed on a downward slide; the psychologically important 30-euro benchmark has been breached – among other things, because many LNG tankers are arriving in Europe instead of turning away to Asia because of better bids. However, this could quickly turn around as soon as gas demand picks up again due to the economy or for cooling purposes. Risks that used to be largely borne by the supplier must now also be accepted by the customer. This also changes the field of activity of gas traders, and the need for advice increases significantly.
Preparing for the phasing out of LNG
Today, MET Germany is preparing for the post-fossil era. Selbach-Röntgen explained that his company also wants to support the phasing out of LNG. However, in his view, the framework conditions are not right for this. A hydrogen start-up network would not be enough to bring green gases to Germany and Europe. “Binding quotas for the admixture of green hydrogen would create planning security for all sides in the context of the hydrogen ramp-up and thus make the costs palatable for the industry," the CEO said, promoting his case. He expressed confidence that a change in thinking could happen in Berlin.