Source: S&P Global Platts
From small beginnings in 2007 and an initial focus on the Hungarian gas market, MET's business has ballooned on the road to becoming a pan-European energy trader and infrastructure operator.
And its revenues in 2022 more than doubled year on year to Eur41.5 billion on the back of unprecedented price volatility triggered by the market upheaval and energy crisis in Europe.
Lakatos said trading houses such as MET were built for such volatility, which helped it weather the market storm in 2022 characterized by huge margin calls and financial uncertainties.
"We typically don't run outright positions -- we were trading the volatility around that," he said.
The market in 2022 was challenging, however. "When you sail in a big storm close to the edge, you never know if you might fall because of strong winds. But luckily those too-strong winds didn't come," he said.
MET traded some 109 Bcm of gas last year and also took delivery of more than 30 TWh of LNG into Croatia, Greece, Spain, Belgium and the UK, becoming one of the most geographically diversified LNG importers into Europe.
"In Europe, we can grow our LNG market presence, expanding through the whole value chain -- that's the strategy," Lakatos said.
MET is now one of two foundation capacity holders, alongside French major TotalEnergies, at the new 5.2 Bcm/year floating LNG import terminal at Lubmin in northeastern Germany, having booked 1 Bcm/year of long-term capacity.
The facility -- operated by privately-owned Deutsche ReGas -- started up in January this year.
"It was very impressive how fast this solution was put in place," Lakatos said. "It shows that where there is the necessity and will, infrastructure can be developed at speed."
Lakatos said MET held a number of capacity positions for LNG regasification in Europe. "And we might still look for additional ones," he said, adding that new capacity would be booked as part of a balanced approach.
"We are trying to put together the entire value chain around the LNG positions," he said.
However, there is still a disconnect between buyers and sellers, with buyers reluctant to enter into long-term arrangements and producers wanting the guarantee of demand security.
That's where traders come in. "We are ready to do our job and we are ready to run this risk. Market players like us should find a way to give incentives to the buyers to enter into long-term arrangements if there is value creation," he said.
Lakatos praised the value of the integrated European gas and power market, saying it should be better appreciated by stakeholders.
He also applauded some of the EU-level intervention measures taken since the energy crisis began last year, but warned against over-regulation.
"I'm a really big fan of the integrated market and I still argue that it is one of the EU's biggest achievements. Sometimes it is a little undervalued or underestimated," he said.
And he warned against a return to more regulated markets. "I'm a little afraid -– and I hope we don't go there -- that the conclusion of this crisis will be that we have to re-regulate this market."
Lakatos conceded that there was a need for a certain level of regulatory limitations, like in any advanced financial market.
"But it has to happen in a smart way because you can easily influence the market in the wrong way and create new inefficiencies," he said.
"On the gas side, I was very much afraid of the expected new regulations at the beginning of the crisis, but compared to my initial expectations, I think that the EU did a good job."
The EU implemented a number of measures in response to the energy crisis, including mandatory gas storage levels, gas demand reduction targets, and the gas market correction mechanism.
On the storage targets, Lakatos said they were very much needed. He also praised Germany's own government-level approach to storage filling which enabled sites to be topped out without damaging the market.
"In Germany, they developed a system that fulfilled both goals -- I'd want to see such elegant, smart solutions for all regulatory involvement in market matters," he said.
As for the EU's cap on TTF prices -- set at Eur180/MWh -- Lakatos said it was unlikely that the price would return to that level any time soon.
S&P Global assessed the TTF month-ahead price on May 18 at Eur30.10/MWh. "Reality solved this issue because prices are now down," he said.
He said there was only a "one-digit" percentage chance of TTF prices spiking back toward record levels, but that it was not zero. The chance of an increase to the Eur180/MWh level, meanwhile, was 10-20%, he said.
When the TTF price spiked to record highs last August, EU officials were quick to blame the market, saying the TTF was no longer fit for purpose.
Lakatos disagrees, saying the TTF market had helped shape global energy trends over the past 15-20 years as one of the leading global price setters and was something to defend.
"This is not an enemy. Europe should use this wisely instead of ruining it. A little bit of value recognition is missing," he said.
Lakatos said the demand curtailments in Europe had also helped security of supply, with the outlook appearing more positive for next winter.
"If we'd had an average winter last winter, it would have been bad. I think this winter, Europe starts from a much better position. The huge surprise was such a high level of consumption reduction last winter," he said.
Lakatos said it was difficult to estimate how much of the demand cuts were the result of high prices and how much was the weather.
But, he said: "If we have average weather and if we continue to see a decent step back on the consumption side, I don't think next winter will be problematic from a physical supply perspective."
"Based on the models that we run internally, I'm more relaxed -- even for those regions that are more exposed. But there are still uncertainties around and the crisis is not over yet."