The energy market is becoming increasingly global, requiring innovation and adaptation

When the Baltic countries joined the European Union in 2004, they were still energy islands and not an integrated part of the EU energy system. Lithuania took decisive, timely and effective actions in solving these issues. An electrical connection to the bottom of the Baltic Sea with Sweden was built, a liquefied natural gas (LNG) terminal was built in Klaipėda, and the gas connection with Poland started operating two years ago.

Lithuania faced the biggest energy crisis in Europe, which arose after Russia’s invasion of Ukraine, as one of the most prepared countries. During the construction of the LNG terminal in Klaipėda, its experience was also useful in other EU countries, where the gas supply depended almost on one supplier.

Europe is targeting US LNG suppliers

The Swiss integrated energy company MET Group focuses on the EU market. It has extensive experience in diversifying gas supply in the European Union. As one of the 20 largest Swiss companies, MET Group is rapidly expanding its activities in Western Europe – Germany and France.

“Europe, despite its high gas storage capacity, remains highly dependent on global markets. This is especially relevant when it comes to Germany, which needed to reinvent the gas and LNG supply system from 2022,” comments Esther Ang, Head of LNG at MET Group.

European companies tend to buy gas from US suppliers, as most customers prefer US LNG to LNG from other sources, so MET Group signed a preliminary contract with Commonwealth LNG in autumn 2023 for the sale of 1 million tonnes per year of LNG and purchase The contract will run for 20 years and will be operated from the Commonwealth LNG terminal currently under construction near Cameron, Louisiana.

According to the manager of MET Group’s LNG division, this agreement is an important mosaic element of the LNG purchase strategy in the company.

Under the Singapore-born CEO, MET Group has recently significantly expanded its international LNG business. The company currently has the most geographically diversified LNG import structure in Europe. Its long-term capabilities include Germany, Spain and Croatia.

MET Group has imported LNG to 8 different countries including the Mediterranean region (Greece, Italy, Croatia, Spain), North West Europe (United Kingdom, Belgium, Germany) and North Europe region (Finland). Over the past two years, MET Group has delivered about 2 million tons (30-40 loads per year).

Also, realizing that the energy market is global, MET Group recently opened an office in Singapore. The Singapore company Keppel has a 10% stake in MET Group.

According to Esther Ang, this unique partnership is mutually beneficial as it allows Keppel Infrastructure to expand its presence in Western Europe with the help of MET Group, while MET gets the opportunity to expand its presence in Asia.

Global competition in the gas market

“Market participants are already talking loudly about the fact that European industrial demand for natural gas will not return to the level of 2022. After Russia’s invasion of Ukraine, consumers experienced a strong shock in terms of prices in 2022 and 2023 and the demand we were used to until then disappeared,” says Esther Ang.

Nevertheless, the current low price environment may encourage modest growth in consumption. Europe is successfully emerging from the crisis and gas prices are much lower this year, recently reaching their lowest level since May 2021.

“However, Europe is competing for gas – and LNG in particular – globally, and the market is very much dependent on how demand develops in Asia.” Currently, low prices, compared to those during the crisis, do not provide any real incentives to secure long-term positions in the market”, comments the manager of the LNG division of MET Group.

Development of MET Group in Northern Europe

MET Group’s main goal is continuous growth with a strong focus on the EU market. The intensive development of the company took place in the Middle East and Southeast Europe, we grew significantly in Southern Europe, Germany and France.

Strong financial indicators allow the company to continue its international expansion strategy, focusing mainly on the EU territory. Especially the region of the Nordic and Baltic countries is considered promising and attractive for further development.

MET Group already sells gas on the wholesale market in the Baltic countries. In 2022, with the installation of the Polish-Lithuanian Gas Connection (GIPL), which connects the gas pipelines of the Baltic States with the pan-European natural gas network, MET Group entered the wholesale natural gas market of the Baltic States.

First, “MET Group” actively participated in the “GET Baltic” natural gas exchange, and later began to provide portfolio and risk management services to local companies, based on its competence accumulated in the Western European wholesale gas market.

in 2023 MET Group has successfully imported its first LNG cargo to Finland’s Inkoo terminal.

“This cooperation with a local company has contributed to increasing the security of supply in this region. It was a decisive step forward for our company to get to know the Baltic Sea region better,” says E. Ang.

In addition, MET Group has also become an active user of the Inčukalnos underground natural gas storage facility in Latvia, which additionally supplies gas to local sellers during the winter period. From the perspective of MET Group, the Baltic countries have great growth potential.

About MET Group

MET Group is an integrated European energy company based in Switzerland. It ranks among the 20 largest companies in Switzerland. Its activities are focused on electricity and gas trade, electricity production, and energy infrastructure development. MET Group’s consolidated turnover in 2023 reached 24.5 billion. euros.

MET Group operates in Austria, Bulgaria, Croatia, France, Germany, Hungary, Italy, Romania, Serbia, Singapore, Slovakia, Spain, Switzerland, Turkey and Ukraine. The company operates in 30 national gas markets and 39 international trade exchanges.

90% of the company’s shares are owned by MET Group employees, and 10% is owned by Keppel Infrastructure, a subsidiary of Singapore-listed Keppel Corporation.