Sticky Asian LNG demand

Asia’s appetite for LNG will continue to grow as coal becomes more expensive. But outages at key facilities in Australia could tighten global supply ahead of this winter. 

This week’s show looks at the key energy market drivers in Asia and a discussion on “sticky” demand. 

Host: 

• Richard Sverrisson, Editor-in-Chief Europe, Montel. 

Guests: 

• Henning Gloystein, Director, Energy, Climate and Resources, Eurasia Group,  
• Saul Kavonic, Director APAC markets, Credit Suisse. 

Transcript

Anna Siwecka, freelance journalist/podcaster: 0:01

News drives markets, and every day Monte's experience reporters are on top of the stories that shape European market developments. Can you afford to miss out? Go to monte news.com for the latest price driving stories and a free trial.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 0:30

Hello listeners and welcome to the Montel Weekly podcast, bring Energy Matters in an informal setting. Today's pod takes us on a slightly different journey heading to Asia to look at the key energy market drivers at the other side of the globe. You may ask why Asia listeners. That is, is a valid question, but like it or not, what drives Asian markets has a large impact on Europe, not just on gas or coal, true global commodities, but also on Europe's power markets. I'm Richard Sverrisson and helping me dissect these complex factors is Henning Gloystein of Eurasia Group, a consultancy, and Saul Kavonic of Credit Suisse, in from Sydney. Welcome to you Henning and Saul. I'd like to just start off by looking at how the coronavirus, how the pandemic's affecting. Maybe I can start with you, Henning. How's it affecting you in Singapore and personally, but also professionally?

Henning Gloystein, Director, Energy, Climate and Resources, Eurasia Group: 1:22

All right. I can start with personally. I'm actually right now on a five day quarantine with my entire family because my son has a runny nose. Okay. He can't go back to school and we're not allowed to leave the house. That's me personally. The situation in Singapore is largely under control. It's there's very few cases. Problem is Singapore. As a country, it's tiny and it relies heavily on global trade including of LNG. But because the borders are closed, we can't get in or out. So that's a bug there. Personally, unprofessionally. Overall, however I'm, we're happy where we are. It's it's the government's handling things fairly well and life goes on. I actually, I joined Saul's event a few months ago. A virtual event from Australia. Now we're talking to you Norway, so you know. The digital world is amazing. If this happened 20 years ago, that would've been worse.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 2:09

Absolutely. I think, and a lot of things are gonna be here to stay. But Saul, how about Australia? We're hearing, lots of stories about lockdowns in Melbourne and Victoria. What how is it in Sydney?

Saul Kavonic, Director APAC markets, Credit Suisse: 2:17

I think in Sydney we can't complain too much. I think we have it better than most. As you say, Australia's lockdown position has been quite different depending on where you are. My friends back in Western Australia, which is one of the LNG Capitals of the world, they've just shut the borders to the rest of the country and the world and are living as normal. Whereas friends and family down in Melbourne have curfews. It can appeal like martial law down there as they're trying to bring record case numbers down under control. Again, thankfully in Sydney. We look, we haven't eradicated here, but we know near where it is in Victoria. So really we can't complain too much. We've had great weather. We can still go out to some nice restaurants. It's actually nice to have, a bit of space in the restaurants these days because it's mandated. So overall I know a lot of people are, have a lot more challenging conditions around the world than we're seeing here in Sydney. So really appreciative to have the climate we have here at the moment.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 3:10

How has the pandemic or how is it affecting the l and g market at the moment? Saul, are we obviously there was a massive dip in demand dipping prices early in the outbreak, but now are things moving back up again or can you describe the current dynamics for us a bit in terms of pricings?

Saul Kavonic, Director APAC markets, Credit Suisse: 3:26

I think probably the best way to describe this is I was having a chat with an LNG marketer last week. Who was talking about LG spot prices could hit potentially$7 this Christmas on how happy days that would be. And I think when we're in a world where a seven LNG price is happy days, that just goes to show how much expectations have lowered over the last few years. If we look at prior to COVID, the LNG supply, demand fundamentals, were already quite weak. Then COVID has just compounded that to see record low spot LNG prices below $2. And yeah, so we are now seeing that pickup to into the fours. We are looking at about, I think the forward curve is a little over five next year and heading closer to six in 2021. But in truth, that's sign of still what's an overall oversupplied market. What's probably been one of the silver linings of COVID though is. Delay to new LNG fis.'cause we could have had another record year this year, but also under construction projects have been delayed because of COVID related logistics constraints. And what that could see is. Provided that demand does start to move back towards a growth path overall for gas, we could actually see a tightening of the LNG spot market in my view, from late 22 through to 2026 as a result actually of some of the deferral of supply that will come online. And

Richard Sverrisson, Editor-in-Chief Europe, Montel: 4:48

the F fis have been the final investment decisions there for those listeners. Unaware of that abbreviation? Yep. Yep. Fine. Yeah, absolutely. How, what are you hearing, Henning?

Henning Gloystein, Director, Energy, Climate and Resources, Eurasia Group: 4:56

Yeah, similar stuff. It is ol just said it's amazing that sort of the peak winter seasonal demand could be seven dollars per minute, B to U. But I think a hidden advantage of this has been, and I think this is quite important, I. This price slide that the LNG industry is allowed to happen has actually really triggered some demand even in, in the middle of this crisis. So we are seeing the Indians that have switched to some spot demand, they've done some fuel switching away from thermal coal to LNG. I've been there. They always said we can only afford LNG if it's five $5 maximum. And so we're there now, the t are assigning new contracts. Vietnam is coming to the. Field, even Jap Japan and South Korea, they were initially trying to turn away from LNG, but they've looked at the forward curve that soldiers mentioned and think okay, we can live with that. Because at the same time, the thermal coal folks haven't let their prices slide. They've played a mini OPEC sort shut down capacity here, there to defend effectively a price of $50 per ton of thermal coal, and that in the short term might save them some pain, but that actually really is displacing some coal. And that's basically what the gas industry has been looking for is a displaced coal, and that only works if you're competitive. So in that sense, I think the cheap gas market is actually long term but good for the industry and they need to be a little bit careful that they don't hope for $7 plus suit too soon. Again, because if you go too much above that, I think you might get off some demand, especially in the emerging markets. So

Richard Sverrisson, Editor-in-Chief Europe, Montel: 6:21

some of these offshoots of new demand or demand coming due to these very low prices. Hani, if I can just stick with you in talking about, maybe we move into Northeast Asia and the short term, short and medium term demand outlook here. What's your view?

Henning Gloystein, Director, Energy, Climate and Resources, Eurasia Group: 6:35

So on the short term outlook, I think it's as ever, it's very seasonal. It depends on the weather forecast, essentially for Northeast Asia. So will probably have more to say on that than I, but on the medium term and even a little bit further than that Japan and South Korea during this Corona crisis have both enacted policy changes. They both, prior to this year, were trying to move away from LNG towards nuclear, for instance, the Japanese case still to use a lot of thermal code because they're selling their ultra super critical. Turbines around the world, but that's changed. They've both moved away from coal, away from nuclear towards more renewables and natural gas and LNG because the said price outlook, they think is in their favor. And also because there's such a broad supply base now the Canadians are coming to the market, the Australians are there, the Qatar is expanding. There's Papua New Guinea, Malaysia, Russia, the us, the market's huge. So they can choose. And the other thing is, of course the all this hydrogen boom that everyone's talking about. The Koreans and the Japanese really wanna tie the LNG industry, especially with Australia to a hydrogen industry, that they want to get Australian blue hydrogen that is produced from LNG. And ship it to Northeast Asia to feed their chemical and steel making and car industry. So I think for those two countries, the LNG demand outlook has actually improved this year.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 7:51

Okay. Would you concur with this Saul?

Saul Kavonic, Director APAC markets, Credit Suisse: 7:53

Indeed. But I think what's quite important to be cognizant of here is how sticky. Some of this demand. So as, any points to, you've got some Indian demand picking up, but it's price sensitive. So if we see prices, go back to Watts. I think the industry considers long-term sustainable pricing, which is still above $6 in MB to you. The question is, does that still last? And you can even point it further. If you look at the uptick in Chinese l and g demand, which is over the last recent months, surprised from the upside. You've also gotta look at what's driving that. And part of it is lower prices where they've basically deferred imported pipeline gas and therefore, LNG imports have benefited, but that was simply unwind as the economics. States and the stickiness of their LNGs, therefore of this LNG demand is really important. And we do need to focus on where we're actually seeing permanent shutdowns of coal capacity, permanent new gas demand coming in, which once the LNG price comes up isn't easily displaced. That's what's of more structural relevance, I think, to the LNG drivers for new investments over the next few years, rather than what we know. We what we see over the last few months where a good portion of that price sensitive demand will simply just evaporate again as soon as we get anywhere near pricing, which is considered sustainable.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 9:09

You highlight India being very price sensitive, but Japan equally where's the cut of, had you mentioned five, $5? For Japan, is there a price which if it goes beyond there, then they become more liable for fuel switching?

Saul Kavonic, Director APAC markets, Credit Suisse: 9:21

I think Japan's probably one of the more exceptional markets to the extent that the, it is less price sensitive now. There's been a long, always an ongoing narrative, almost three or four years now about coal to gas switching on a price sensitive basis in Japan and also in Korea in practice, it's been still very limited for a number of. And regulatory constraints. So Japan's probably not I'd say, I'd argue is not in that, but it's more, some of the other markets, including China and India in particular as well as in Europe where we wanna be looking at that stickiness of that demand. And not trying to draw a line from a three month trend to a three year trend.

Henning Gloystein, Director, Energy, Climate and Resources, Eurasia Group: 9:58

So on the Japan and also South Korea on that I agree that they're not very price sensitive in the short term market for the next. Seasonal year or two, but that policy change that I mentioned a bit earlier. Is based on their long term view of LNG prices versus coal. And in the past they had met in Japan so the ministry of economics, technology and industry, they had the view that coal would be more affordable than LNG in the long term. And hence they kept supporting coal and they were the last industrialized nation to really push thermal coal still. And that's changed. And that is thanks to to a long-term outlook that they think points towards affordable LNG. So I agree that it's not that they're not very price sensitive in the short measure. They can accept prices that are much higher than $5. But the long-term outlook is actually, has changed because they actually think LNG has become more affordable on and more broadly available, but

Richard Sverrisson, Editor-in-Chief Europe, Montel: 10:46

They're going for LNG purely in a price factor and as competitive to coal and not for environmental reasons. As, as you coming, we're listening to this from a European's perspective. It, we're. We've had the green deal, the green recovery fund at the forefront. But these decisions are taken purely on the basis of market economics.

Henning Gloystein, Director, Energy, Climate and Resources, Eurasia Group: 11:04

We talk a lot with the governments there in Desia group, and so they yeah, they, so they have developed a whole industrial policy around using more LNG Yes. Renewables as well. More hydrogen. But it, it is aimed at keeping the industry running at the best economic price, essentially lows, feedstock price, that it also reduces emissions is a very welcome side effect for both of them, for the Koreans and the Japanese because their Paris signatories and they think that, probably rightly that they can sell their products better if they're greener than they were before. But you're right in saying this is not necess, not a declared green policy. As it is in Europe for the case, it's an industrial policy.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 11:40

Interesting. If we can look at the supply side, there've been several outages in Australia, for example, some supply reductions. Could you give us an overview here what's happening on in Australia? This

Saul Kavonic, Director APAC markets, Credit Suisse: 11:51

is the other part of the equation. When you talk about the increased spot, LNG prices and it's not demand driven story only here, it's very much a supply driven story, particularly over what we've seen in the last month. Where we've seen some surprise outages from the region here in Australia, compounded by the shut-ins we've seen in US supply. So in particular know as a seasonal market local supply Pacific Supply to Pacific demand matters particularly as we head into sho peak demand season in the Northeast Asia of winter. And what we've seen here is outages small edges from Queensland LNG projects, but particularly from Gorgan Chevron's Gorgan Pro Project and Shell's pre project. Where we basically seen 8 million tons taken outta the market. And particularly when it comes to Gorgon, that was about 5 million tons taken out with almost no notice to the point that you saw participants in that joint venture scrambling to buy spot cargoes to send in and make good on their contracts. And the latest reports that are, that be coming out on that are suggesting that we are gonna see, at least one or 5 million of that, of this 15 million ton facility out. Into first quarter of next year. So right through the peak demand season. It's hard to put a exact number on that. But if you just look at, what's happened, for example with the us right? US is also seeing shut. This is price sensitive, probably still worthy of note. This is the first time we've seen material scale LNGS on an economic basis in the industry history. But if we look at that, us shutting, they've shut in about 40 million tons or so and on a million ton per annum annualized basis right now. That should return as the price signal comes back. So you say, okay, there's 40 million tons of new supply that can of supply that can return from the US as we head into Christmas. But let's then look at the demand side. Typically, over the last two north northern hemisphere winters, we've seen 70 million ton per annum equivalent increases in demand as we've had into the December, January period. So that demand uptick, and those have been actually mild winter. So if you could see a severe winter, could see it actually spike beyond that. Does really seem to, bring that balance back and perhaps even see some tightening at least for one or two months. Of course, it's not that simple, but given the amount of floating storage and so on, that's also out there. But that additional five to 8 million tons that you're seeing from outages from Go and Ute can really tip. The balance over. How many cargoes do we need to bring across, potentially from the US all the way around the Horn of Africa into the Asia Pacific market in a time which can then tighten up shipping mar shipping prices, which can see this is pending. When it comes back to why could we potentially see prices hit seven. That's why we can potentially get there. Now, that's not a base case, I don't think, but certainly not for us or perhaps anyone yet. But I think people are starting to see how those puzzle pieces. A slightly more severe winter could see spot prices get up to that level again before falling. As that peak demand season ends, we head into the shoulder seasons further into 2021.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 14:55

Fascinating. So basically, outages in Australia could see the European market tightening, if that's a, there's a very crude summary of what you're saying, ul. Yeah. Henning what, how do you see the supply side? You mentioned new producers coming in Canada, Mozambique, is this adding to the gluts or could this kind of alleviate some of this, tightness that Saul's referring to

Henning Gloystein, Director, Energy, Climate and Resources, Eurasia Group: 15:14

what we are already seeing from Mozambique and Canada that's already factored into the market that is providing the outlook for ample LNG for the next few years. The big question as Sol has mentioned, is what happens from around mid this decade, so the mid 2020s, how much FID will still LNG will still be produced and that will decide whether the latter half of this decade becomes a bit tight, and that's this. Pool game. Because on the same side on the other side, you've got the demand side. They look at the price. So they obviously want cheap LNG and more availability to create new demand in Vietnam and in Thailand and India. Whereas the producers obviously would prefer a higher price. And that's the famous balance that the market needs to find. My personal view is I think a lot of the projects that haven't taken FID yet. Won't be needed, be certainly some, but I think every financier, so maybe you on this one will look closely at at the feasibility of every single project right now because there are clearly too many out there still vying for money than the world needs. That's my personal view.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 16:14

Absolutely. Is there a glut of projects out there then Saul, then they won't all see the light of day.

Saul Kavonic, Director APAC markets, Credit Suisse: 16:18

I think the crux of this question is, as Haning says, there's, most of these projects aren't gonna be needed. But that doesn't mean they're not gonna happen. And this is what the big risk is from 2025. In particular, we've got the Qatari expansion, which of all the pre FID projects, that's the one where all signals are still pointing to that. Taking FID next year. Which is 30 plus million tons of additional supply. So if we assume Qatar takes FID, the truth is that window from about 2025 to 2028 is looking pretty full. And then you've still got some Russian projects which might actually get traction later next year. We've got a number of projects in the region here, which is still looking to take FID. As early as next year as well. And so the risk is if we start getting outta these projects going in and trying to wedge some volumes in there as well, we could be, sowing the seeds of the next downturn from 2026 through to 20 29, 20 30. Really proving the cyclical nature of our industry on that roughly four year time cycle. And that's something that it's still unclear if COVID and the shock that has provided to the industry is gonna be enough. To create enough caution, enough to discipline and decision making to prevent that from happening. And I think the feeling right now is we still erring on the side that it's likely to repeat the cycle all over again and we overinvest again and we see that downturn in the second half of the decade. Once more.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 17:50

Interesting stuff. If I can turn to you now and talk a little bit about coal. I mean in Europe it's it's on its last legs. Both through market forces being priced at, but also regulatory moves policy as a clear direction, several countries being declaring themselves coal free from certainly the middle parts of this decade. What's happening in Asia? You mentioned there's a policy shift. In Japan and Korea, is this also starting off the demise of coal in the region?

Henning Gloystein, Director, Energy, Climate and Resources, Eurasia Group: 18:17

So coal so we're the view that coal demand has peaked globally probably about a year or two ago. But like you say, it's already in decline in many places, especially Europe and Japan, South Korea as well, which means that there is still some demand in increase in some areas. India, most certainly parts of Southeast Asia. China still has strong demand. The reasons there are different though, so you've got two big reasons for coal being supported. One is pure political. That's China and India. Neither of those countries can just switch off their coal industries because they would make literally millions of people unemployed and they can't do that even outside of a crisis. They coal India and India's one of the biggest employers and in China. Coal mines as well, but also the coal fired power stations. You can't just switch that off. So basically they're gonna, the Chinese especially, they're gonna shift gradually, and we see that with the gasification. It's serious, but it's slow. And in India it's even slower because they don't have a gas pipeline network. They, they don't have a. Gas network of any sorts. So that's why coal is well supported there. And in, in Southeast Asia, of course, Indonesia has a huge incentive to keep coal demand up because it's their biggest export product. And that's why coal demand in Asia is stickier for the first reason. The second one is just the ease of. Getting coal into the market. So if you're an emerging power, which still has to electrify the world, but building coal fired power stations is much easier than us building an LNG infrastructure for importing LNG. And in that sense, bringing electricity to the people is easier using coal, even if it's more polluting than using gas. The big competitor there is renewables, especially in South Asia, Seoul and India, particularly us. Solar power plus batteries are now coming in at large scale, a thousand megawatt plus on tenders that outcompete without subsidies, every other source, coal, gas, anything that's gonna be the big competitor. Whereas gas, I think, has bigger chance in south and Southeast Asia where there's industrial use for it, let's say in a chemical facility next to a power station. But that's basically this political support. In Asia is one of the main reasons why coal has been sticky for better or worse.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 20:23

That's fascinating. I think I was about to ask then what's about, what about renewables? But you've highlighted where solar plus batteries could have a big impact in the southern parts of the region, but what about wind in, in Northeast Asia particularly, I'm seeing you're seeing a lot of. European or big global companies moving into Japan, particularly what's happening in the offshore world.'cause then may potentially, you've also got green hydrogen maybe sometime in the pipeline.

Henning Gloystein, Director, Energy, Climate and Resources, Eurasia Group: 20:46

Yeah. Offshore wind really has been not a big story in Japan so far. They've been very wary of it because of the weather. It's sometimes it's not very windy and sometimes it's far too windy. Because all that area of the Pacific, of course, is very prone to extreme storms. And the wa the water is extremely deep and tectonically active. So all that makes it much harder to produce offshore wind in the Pacific than it is in the Northeast Pacific than it is in the No Sea or Baltic sea. But it's happening now. It's gonna be rolled out in Northeast Asia. Solar has so far been bigger, but they're gonna build it out And in Southeast Asia, Vietnam is a big market there, but if you go further, coming here to Singapore it's really not very windy here. And whereas it's much sunnier, so solar really stands a bigger chance there. And in India, as far as I know, but I'm no great export on that. It's West Coast India, much better for offshore and onshore wind than East Coast. And that has monsoon region and general wind trends that are going on there. And, but, and the second you go inland in India, it's all about solar because it's incredibly effective there.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 21:45

So what do you think about this massive or this potentially rollouts of renewables, either solar or wind, and how will that dampen. Potential LNG demand going forward. If you are, if you're making an FID on a plant and you're thinking, wow look what's happening on, in, in solar. Is this really a wise investment decision?

Saul Kavonic, Director APAC markets, Credit Suisse: 22:03

I think we need a couple. The trend we're seeing with renewable costs and the increasing penetration of renewables into energy grids around Asia. With also the decarbonization narrative and ESG considerations that are pushing oil and gas companies to become less oily and more gassy, because that's. Creating a potential powder keg of risk for pricing. So you, for example, we can see the recent report by bp. Were very subdued outlook for oil, but a bullish case for gas. So you can see the big players in the market are looking to shift weights towards gas in particularly LNG. And this is also driving them to. Build LG supply without having contracted all the volumes. We marry that up then with what's happening in Asia, particularly in Japan actually, where there's a big market to play for gas, but the huge degree of uncertainty of what that's gonna be on a 15 year outlook. Because we don't know what the pace of the renewable build out is gonna be. And as a result, you have the biggest LNG buyers in the world who are not willing to make firm long-term commitments to LNG supply. So when you've got suppliers willing to bring on new supply without long-term contracts, and buyers not gonna sign those long-term contracts or wanting a lot of flexibility, there's a risk that if the renewable rollout. It does come at the more optimistic end of expectations that you've still got a large amount of LNG out in the market, which then doesn't have a home. And this is a big departure from the LNG sector anytime really in its history. Up to a few years ago when previously they would never build supply unless the demand was 100% locked in. We no longer have that case, and that's why we're seeing much more. Gas hub kind of pricing elements, which are gonna be increasingly influential on a 2020, kind of 2028 to 2030 plus view. And while it is everything to play for the risk can seem to be appeared skewed to the downside. Due to this decarbonizing trend combined with the pace of renewable costs and build out there,

Richard Sverrisson, Editor-in-Chief Europe, Montel: 24:09

what are you seeing heading here about the, Saul mentioned these contract trends. In Europe we've seen moves away from oil indexation. What, what's happening in Asia?

Henning Gloystein, Director, Energy, Climate and Resources, Eurasia Group: 24:16

Yeah, that's that's an interesting one. So here in Asia, I think it's still two thirds oil index and long-term contracts. There has been a trend away from that in the last year or two. But the Taiwanese, the Koreans and Japanese still have a soft spot for them, and they, and actually, as Sol mentioned, if the peak oil demand comes closer and is imminent, and oil prices look stably at low levels, then oil index gas contracts start looking okay again. And you save yourself the volatility of the spot market. So certainly that becomes interesting. But for sure, we've seen volumes of spot trading in Asia go through the roof in the last three years. I remember year after year reading articles about this is the year Asian spot trading milk coffin never happened, but about three years ago it did happen and it's gone up. So it's there and it's not going away. And this is a global market now, mean, Seoul's already mentioned the Americans are very, almost a seasonal swing supply trader now, and that's price sensitive. We saw this year for the first time, Asian, European, and American prices essentially converged. This is a globally tradable market now, and with LNG supplies with a global portfolio. So I think that the share of oakly traded LG will still increase, but I do not think that the long term oil index contract is dead in Asia.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 25:27

Sticking with that. Global elements of the LNG market. Henning, obviously geopolitics has a massive role to play here, and potentially there's, discord between Washington, Beijing, Germany, Russia. How do you see this playing out in the global LNG market? For example, if there were to be a, hardening of, talks between America and China, how would this play out?

Henning Gloystein, Director, Energy, Climate and Resources, Eurasia Group: 25:48

Yeah, it's already played out in the sense that, all that American LNG hasn't arrived in China as the Americans hoped it would. And even, late last year, there was a phase one trade deal between Beijing and Washington. And some LNG from America is going to China, but nowhere near what they were hoping for. So in that case, it's already happened. You can also see, in Europe the, it's almost going the other way because the SPAC with around Navalny and North Stream two pipeline between Russia and Germany, that it's hugely a geopolitical. And in Europe, I don't really have a full answer there because. I don't really know what's going on in Berlin about North Stream two, but obviously the LNG guys wanna support the gas market and sell their own gas. So the Americans are looking at high sales into Europe and probably lower into Asia because the Chinese aren't gonna play ball on the other side. There's other producers who really want to benefit from this, and the Canadians are in there. They say look, we're a stable country. We've got LNG, we'll sell it to Japan. We're allies and we don't start trade wars. The Australians obviously that's their unique selling point as well. We're very good partners strategically, economically. We're reliable. It's wonderful. And in all this, I wouldn't actually, in a purely Asian point of view dismiss Malaysia. I know it's a bit nichey, but they're well positioned to serve the Northeast Asian market because they have established ties. They sell LNG very reliably and they're quite close to Northeast Asia. By in, in Asian terms. Overall, how will the geopolitics impact the gas market? I think it's massively benefited from this diversification of supply. Not 10 years ago, there were very fuel energy supplies and in Europe there was much less alternative to the pipelines from Norway or Russia. Now there's more energy import tournaments, there's more L Energy producers, and the same applies to Asia. And this is exactly what the emerging markets are looking at. They didn't wanna sign up to one single. Seller of LNG that they're hooked to for the next 25 years. They wanna see a plethora of supplies that they can switch in between in times of crisis. So I, I think this more diverse LNG market actually gives it some stability from geopolitics as we see rolling out right now.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 27:49

Excellent. Gentlemen, that's about all we have time for now. I think we could continue for hours talking about this but unfortunately we have to put a stop to it now. But thanks very much Saul and Henning for your views on this fascinating global market. I hope we can return and invite you back at some point in the not too distant future. So thank you gentlemen. Thank you. Thank you, Richard. Thank all good to talk. Likewise. So listeners, that's about all from the Monte Weekly podcast this week. You can now follow the Monte Weekly on our own Twitter accounts. Aptly name the Monte Weekly podcast. Please direct message any suggestions, questions, or let us know if you'd like to be a guest. You can also send us an email to podcast@montenews.com. And remember to keep up to date with all that's happening in the energy markets on Monte News. You can subscribe on Apple Podcasts and Spotify or wherever you get your podcast from, and please leave a review if you can. Thank you and goodbye.