End of year round-up, outlook (Part two)

End of year round-up, outlook

In the next two episodes we discuss the key energy issues in the year to date with Montel journalists, while also looking forward to 2024. Despite markets having come a long way since the crisis of 2022, they remain jittery and volatile. Part one will focus on Spain, Italy and France, while part two discusses Germany, the Nordic region and global fuel markets.

Host: Richard Sverrisson
Guests (Part one): Enza Tedesco, Editor Italy; Pablo Bronte, Editor Spain; Chris Eales, Editor France; Muriel Boselli, Correspondent France
Guests (Part 2) : Andreas Lochner, Editor Germany; Gert Ove Mollestad, Editor Norway; Olav Vilnes, Editor Norway; Laurence Walker, Deputy Editor-in-Chief; Andres Cala, LNG Correspondent

Transcript

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 0:06

In this second part of our roundup of 2023, an outlook for next year, we turn to Northern Europe, in particular the Nordic region and Germany. I'm Richard Sverrisson and I'm joined by my colleagues Gert Ove Mollestad who's editor for Norway. A warm welcome to you, Gert!

Gert Ove Mollestad, Editor Norway: 0:25

Thank you.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 0:25

And to Olav Vilnes, who's editor Nordics, welcome to you Olav.

Olav Vilnes, Editor Norway: 0:29

Thank you.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 0:29

And finally, last but not least, Andreas Lochner, who's editor Germany. Very good to have you on the pod again, Andreas. Now I think I'd like to start with the Nordic region Olav. Again 2023 was very, a very eventful year. Could you highlight some of the key developments in the Nordic region?

Olav Vilnes, Editor Norway: 0:48

It was very interesting. If you go one year back, I think the average system price in the Nordic region was about 200 Euros. Then you had a very wet summer around, suddenly you had a price at I think it averaged down at 13 Euros in the early or late summer in August. So I and I, in between there, you even had. Negative prices for the first time across the region. Never seen so low prices before. And that is, it came up again in the autumn when demands started to rise. And I think now you're back at around 90 euros in on an Nordic level. So it's been a very volatile ride this year, price wise.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 1:21

And how about in Norway? What were the key issues in Norway Gert?

Gert Ove Mollestad, Editor Norway: 1:24

Yeah. As Olav mentioned, the very low prices in Oslo actually, they, we had. Following the storm hunts, which poured down like 11 tet hours of rain over eastern Norway and Sweden. We got a September average for Eastern Norway at 0.98 euro for the megawatt hour. And we have never seen solo prices in in Norway ever since the start of the power market. So last year we had record high prices and this year we have had. Record low prices. So it's really a volatile market as as what I've said. And we even had a dam breach due to all the water. So there was a power plant that was flooded and collapsed due to during the storm. So it was a really serious event here in. In the early autumn.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 2:12

And how about Germany, Andreas that we didn't really see very low prices there, did we?

Andreas Lochner, Editor Germany: 2:16

Yeah, the situation in Germany is quite different from the Nordic region. We've seen a longer term price trend to the downside. So prices were generally falling over the year, but still they are at a very high level. More than double the level than we've seen in the past decade from 2011 to 2020. So we're still at price levels that we wouldn't have expected before. The war, Russia against Ukraine, and, we can't expect to see prices like this, like in the last decade. Anytime soon.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 2:50

Olav, if I can turn to you and ask about wider things. And one country in the Nordic region in particular, which saw quite, tumultuous events really in 2023. And that's Finland. Could you describe some of the, I was thinking in terms of supply, but also a little bit of a bidding error on the spot market. Could you just talk us through that?

Olav Vilnes, Editor Norway: 3:07

Finland had a very interesting year actually. They I remember last autumn, I think we had this conference, Finn Energy Day when the TSO was there. And he was really concerned about the supply that winter, because you had. Cut off the lines to Russia due to the war. And then you also had yet to complete this big nuclear plant. Three. Now th that did come online like in April for commercial use this year. So you missed it for the whole of the coldest part of the winter last year, but still managed because the weather was relatively mild. And also people saved energy because of the high prices. All kto came on and suddenly Finland also had the lowest prices in the Nordic region in the summer because then you had also a lot of new wind coming in. So it was extremely volatile. And then of course if you continue with Phil and you also had a gas incident there as well the bolt connected that then that vendor offline in Autumn due to. Potential sabotage. They never really found a reason for that. But it also isolated Finland as a guest market. Then I'll have to rely solely on l and g, which drives up local prices compared to the rest of of the Btic Sea region. So those are fundamental things. And then of course just the icing on the cake was this bidding mistake that came now in late November when when you had connect energy. Ly bidding in a huge sales speed every hour, I think the half of the vintage consumption, and draw prices down to minus 500 euros for 10 hours. And created almost should, potentially could have created a system collapse. But that was of course, a very, a. So one of these very strange incidents that happens that no one could really foresee.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 4:39

Absolutely. So a very interesting year in many ways in Finland, but Gert what happened in Norway in the policy side in particular?

Gert Ove Mollestad, Editor Norway: 4:45

The current government is really struggling with one party opposing in Norwegian membership in the eu. And then you have the Labor Party, which is at least partly pro and this influence all kind of policy making in the government. And just a couple of weeks ago the finance minister from the center party he proposed not to renew old cables to Denmark. So there is a real tension within the government of how Norway will cooperate on the power side with the rest of Europe. It bog everything down, and there's a huge delay in implementing new EU regulation in Norway due to this. So it's a headache that probably won't sit disappear as long as these two parties are in government together.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 5:28

And that's the hot topic or the hot potato if you like, or of the cables, the interconnectors. That's always been quite quite controversial in Norway, hasn't it? Yeah,

Gert Ove Mollestad, Editor Norway: 5:36

it's really, it is a really kind of a. Making a very tense debate. And you also saw that during summer and early autumn when the southern most part of Norway had quite higher prices than the rest of Norway, both due to the incident with all the water that came in the eastern part of Norway during the storm but also the stronger co connection to the continent. So you had a really division within Southern Norway, and that's a new thing and there's been a lot of political tensions regarding that. And I don't think that will disappear anytime soon and maybe even be amplified with the new Viking link coming from Denmark to the uk, which also can. Can drive up prices a bit further for ins in, in southern Norway. So you get an even stronger connection to the UK from southern Norway, both with the, we had a direct link, but also with the new cable, which is coming from Denmark.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 6:22

Yeah. And obviously that's not so popular in, in Southern Europe. But something that we also reported, I think we broke the story gap, wasn't it? That, big industrial production or aluminum producers are thinking of shutting down production in parts of Norway.

Gert Ove Mollestad, Editor Norway: 6:34

Because you the parts of industry that is not hedged with long-term contracts, they are really they are really struggling due to the high prices, obviously. And then there's, I don't know, is around 50% of the aluminum production in Europe has been closed down due to the en energy crisis. And there are some plants in Norway which also average reduced production and some are considering even. Stopping completely due to this the the current plant to Alcoa in Southern nor where they managed to get a a contract with StarCraft for one year. But what will happen after when that expires? That's we have to wait and see but, the price, the high prices really has an impact on industry. That's quite clear.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 7:12

We're seeing that very clearly. Absolutely. Good. So if we move then to Germany, Andreas, and what happened there? You highlighted what's happened on with prices, wholesale electricity prices in particular, but what were the key kind of policy issues or developments that we saw over the last 12 months?

Andreas Lochner, Editor Germany: 7:26

The key policy issues? So there were quite a few. It was a busy year, but in general. Regarding energy policy we've seen a very strong performance of the German government, in my opinion, in 2022 when they governed the whole crisis dampening the impact of the Russian attack on Ukraine. They had to manage the nationalization of major gas and porters like juniper and the former gospel from Gaia. Securing energy for Europe, it's now called. They had to manage to get l and g import capacities and they had to fill the storage capacities, gas storage capacities in, in, in Germany. So they had quite a lot of tasks to fulfill and they managed to, but in, in 2023 the performance was rather weak though. They tabled a law for decarbonizing the heat sector. Which is necessary if you want to reach carbon neutrality by 2045. But they received a lot of resistance on that. Also the, within the government, again, in Germany as well as a Norway, there was a lot of tension within the government about this law and the whole sort of mood in the. And the country turned around. There's a lot of resistance against sort of climate protection measures renewables expansion and so on. And then we've also seen the budget disaster recently with a constitutional court ruling wiping out 60 billion euros out of, a necessary fund to, to finance the green transition. And now they have even more problems because they. They lack money and 60 billion euros, that 60 billion euros, that's not nothing, quite sizable. And this will be an issue for the next couple of years. Because they want to invest a lot into decarbonization of the industry. Green steel to name it green hydrogen. Of obviously renewables expansion and at some point they may run out of money and that's a problem obviously.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 9:31

So in a sense, we germany's been at the forefront of the boom in renewables in terms of rolling out wind and solar. But now it seems to be slowing then from opposition at ground roots level. And also because there's no money to fund it.

Andreas Lochner, Editor Germany: 9:46

Yeah, we'll have to see. This year we've seen, a record year for solar expansion, for example, we've seen 12 gigawatts so far this year. Solar capacity rise. We might see that again in 2024. But if we look at the figures now, we've seen, like this year for the first time ever, more than 50% of electricity stemming from renewables which was in total 267 terabyte hours. But again, that's below target really for Germany's way to 2030 when they reach, they want to reach 600 Tet, 600 t hours of renewables, electricity. And as I mentioned already we see already a lot of resistance in Germany against renewables projects against yeah, the government in total. Yeah. If we have to more than double the electricity coming from renewables it will be quite A struggle.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 10:41

Absolutely not so many low hanging fruit left, but I think, but even, 275 Tet hours of renewable production, that's. Sorry, close to two seventies is very impressive indeed. But before I turn to what you expect to see next year, Andreas, I'd just like to ask all of, and what will you think will be, what will be the key issues in the Nordic region next year, in the next 12 months, for example? Olav,

Olav Vilnes, Editor Norway: 11:04

I think a major issue is of course what there's a big news. You need a lot of new renewables and you need investment decisions to, to get to these targets for the third targets and to meet also. Rising, at least expectations of rising demand as electric, as societies electrify and use electricity wider in the transport sectors and in the industry and so on. And I think that the tempo there with the cost increases is, it's a big challenge. This, the first ever Norwegian time that is autumn now is winter will show this big uncertainty on whether people will actually. Commit to that if it become becomes too expensive or not. You have Denmark have nine gigawatt of offshore tenders lined up for next year. It's a huge amount of of wind that should come online or a lot of competition there for, to build offshore wind farms that should come online about 2030. So I think there's a big race there to be build renewables. And then you also have the the Swedish plans to build nuclear. Which is a different thing that will also be more of concrete, how they will design maybe a subsidy scheme CFDs, that can make them reach this new target of getting 2.5 gigawatt, new nuclear capacity online within by 2035. It can be also be interesting to follow next year.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 12:13

Would that be interesting? Are they. Going for SMRs or haven't they really decided on what kind of what kind of nuclear reactors they, they would like?

Olav Vilnes, Editor Norway: 12:20

I think they will leave it up to the market participants. But if you look at the communication, I think the swes have come quite far also suggesting you need larger units. Not only SMRs, if you look at that, listen to the energy minister. There's also a process in parallel going on in Finland to build new nuclear. But I think in Finland there's more an SMR debate because they already have this large reactors now, and they probably see that if the reactors get too big, then. It's difficult to manage a system so that there's probably. Yeah, more small scale there and maybe large scale, but I think that's up to the market participants to decide what they want to invest in. And then it's up to the, yeah. Then go. We just yeah. Come up with the scheme.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 12:54

Obviously, it's very costly and time consuming to build these large scale nuclear facilities as we've seen both in in France, Finland and in the uk. But what are the expectations then for prices all of, in, in the region? What do you, what are analysts saying, what are the people that you speak to on a daily basis saying where we are heading in terms of wholesale?

Olav Vilnes, Editor Norway: 13:12

I think we will have another very volatile year. Because you have, it's very much due to hydrology. If you have a very wet summer, you can get really cheap as it did last year because you have all the new wind that increases every year in the market. So you get a much stronger downside. But then again, if it dries up and you need to, then prices always historically go up to the shorter mod cost of coal or gas fire plots and. As long as gas prices are as high as they are right now. I mean they're lower than they were last year, but they're still high. From historical perspective, that creates also a higher upside. So that's why you saw this year, you got went from zero in the summer to now 89 euros in the winter. So I think that's. It's big, much more volatility than you did in the past or in the 2010.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 13:54

Absolutely. And Gert Norway what do you think, what do you expect to be the key issues? Your crystal ball is out now. What do you think is gonna happen next year?

Gert Ove Mollestad, Editor Norway: 14:03

Yeah. A very interesting thing will be how the. Acquisition of the financial markets in the Nordic will be ex announced in June. I think it was that they will buy the na commodity exchange in o also and take over the financial Nordic power market. And, but there is there might be some competition issues there. European unions. Looking at that. If they're going to allow the acquisition, and then potentially that can be a really. Major change for the Nordic power work, as we have known it so far. It was the first of its kind in the world and there might be a really big change, big changes if the ex gets the green light and go through with the plants they're talking about trading in the bidding zones instead of a a financial market linked to the system price. So there, there might be, the end of the financial Nordic market as we know it. So that will be a huge change if they go through with that. So I'm, that's quite exciting to see how that will pan out.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 15:06

But in, in terms of policy also, do you expect any changes to the cables debate? Or for example, the growth of wind in Norway.

Gert Ove Mollestad, Editor Norway: 15:14

Oh, there's hardly any wind on shore coming on. There's hardly any concession applications in and so there will hardly be any new onshore wind power in Norway until th 2030. And, but the major point will be the auction for the first offshore wind park in the southern called in Norwegians just the. Offshore, Denmark actually. So it's very far from the nor Norwegian market. And that's very expensive to build out. So there is a dealing there for 23 billion nos in subsidies. And the question is it enough for the player to actually go and bid in the auction? And that's that will be very exciting to see. In the first quarter. I think they will then announce that auction and we got, the green light from the regulatory body Sr yesterday on that subsidy scheme. So that will be,

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 16:04

so you and your Norway team will obviously be watching this very closely and we'll be reporting on a months news. Absolutely. Yeah. Finally, and Andreas what do you think what are gonna be. The key developments in 2024 in Germany, is are we still reeling in the aftermath of this constitutional court decision or will there be other issues as well at play?

Andreas Lochner, Editor Germany: 16:22

I think the main issues next year will be one thing is the power plant strategy, which the German economy ministry. Plants, the table in Q1 Germany needs backup capacity of roughly 25 gigawatts to back renewables generation. So very well known. When the wind doesn't blow, what do we do thing?

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 16:45

The Germans have a key word for that, don't they? In the, when it's in the winter. What's that again? Andreas?

Andreas Lochner, Editor Germany: 16:49

Dunkelflaute

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 16:50

Yeah.

Andreas Lochner, Editor Germany: 16:51

Dunkelflaute. So when it's dark and there's no wind, so no sun and no, no wind, and, the problem is really next year is 2024. Already we need the units by 2020 by 2030. So within six years, 25 gigawatts. That's quite challenging. And many doubt that this will happen. But they want to table the strategy in Q1, hopefully. They initially planned to table it in Q1, 2023, so one year delay. So even less time to build the units. So that's one major thing to happen. And at the same time, obviously if you don't know which capacity will come online by 2030, there will be speculation about the coal exit because obviously Germany also plans to exit coal fire generation, a lignite fire generation. But so far we need those units to cover demand. Yeah, the, these, the two policy issues here are linked, but they are probably the most important issues in 2024. And market-wise as all I've mentioned for the Nordic region, it will also be probably super volatile. In Germany the forward market really depends on gas, on the gas prices, that means today, nowadays, LNG prices, but on the spot market this year already, we've seen everything between minus 500 and plus 500 for our hourly prices. And this will obviously continue with the expansion of renewables.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 18:20

So if I understand you correctly, gentlemen, we're in for another bumpy ride in 2024. So Olav, Gert and Andreas, thank you very much for being guests on the Montel Weekly podcast. In the final part by end of year episode, we turn our attention to global fuel markets. That is to say LNG, gas and Coal. So it's a great pleasure to welcome Laurence Walker, Montel's Deputy Editor-in-Chief. Welcome Laurence.

Laurence Walker, Deputy Editor-in-Chief: 18:45

Thank you.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 18:45

And Andres Cala who's our LNG correspondent and also warm. Welcome to you, Andres.

Andres Cala, LNG Correspondent: 18:50

Yeah, thank you.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 18:51

Let me, start off by asking you, as I have done to all of our really or many of our key journalists what were the most important issues in 2023? Laurence?

Laurence Walker, Deputy Editor-in-Chief: 19:02

I'd say it's been a year of uncertainty, so follow. And massively turbulent 22 2. But it's ultimately been a good year in terms of supply security for both coal and gas. Then we ended a rather mild winter last year with higher than expected stocks for the fuels, which kind of put the comp, put the region on a fairly good footing. For this year. There of course been lots of bumps along the way. Lots of concerns. There's been a thing such as the the Australia energy strikes the damage to the connector in Finland, which people initially thought was perhaps linked, some kind of sabotage, like with the Nor Stream which spooks people a bit. There's been the ongoing war in Ukraine and then obviously the the war in the Middle East, which is. Obviously caused concern in certain areas we have yet to see real impact on supplies or issues. But certainly from a to geopolitical viewpoint, it's been a concern. And then but in terms of all of these things, there must have been really lasting in terms of supply issues. So it's been a, I'd say it's been a touch, still fairly turbulent, still fairly uncertain, but it's been. I will successful in some ways in terms of supply, certainly reaching our. Stock levels ahead of winter and in maintaining new supply routes.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 20:25

Absolutely. That's in, that's For Europe in particular here? Yes. That we're talking Laurence and Andres what for LNGI mean, it's also I think it'd be fair to say another turbulent year given the geopolitical situation.

Andres Cala, LNG Correspondent: 20:36

Sure. It's it's been a, not just for energy for gas markets in general. It's been a tight as Laurence was saying, tight, shaky. Shaky from my point of view and very geopolitical year. Fundamental fundamentally, the gas bounds has not been that bad. It's actually been good mostly on robust supply pipeline su supply and robust l and g. We're gonna import into Europe just about the same amount of LNG that we did last year in 2023. So yeah, 2023 numbers should be should look pretty similar to 2022. And to be more exact that's about 30% of total LNG import global LNG import. So global LNG imports were 5,550 VCM and Europe took in this year around 30% of that Asia took in the 66%. OO Obviously, the rest of the world took the remaining share. But it was also the year in, in, in my view where especially LNG consol, it consolidated itself its role as a global fuel with both Asia and Europe, depending and competing for it. It used to be more Europe used to be the think market that the, that changed with the Russian invasion of Ukraine. But this year it consolidated as a global fuel. But of course the unintended result of that was the market became ultra sensitive to geopolitics. We had, firstly, Australia strikes although they, as Laurence mentioned, they they really didn't affect the European ballots very much. Then we had the Middle Eastern turmoil first reflected on Egyptian disruptions to Egyptian LNG exports. Then we had concern of over the canal sweats initially over the Gaza War, but. Now, more recently with potential disruptions to shipping routes. And I think what we witnessed this week pretty much spells out what was the remainder of the year or what 2 20 23 was like. We had prices spike on Monday and then, loose all those gains on the following day. And that's pretty much a narrative of what gas prices is driven by LLG have done this year.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 22:45

We are recording this just before Christmas. But I, so the developments you're describing here, Andres, just are really an indication of how nervous the market remains, isn't it?

Andres Cala, LNG Correspondent: 22:54

Surely does. And again, in my view that this goes back again to LG becoming with global fuel, let's not forget that the European balance the reason we have been able to achieve a balance this year now are two, the two main drivers. One is demand destruction. The demand destruction is the number one balancing. Driver in European markets. But there, there was a, there's been also a, yeah, strong competition and geopolitics involved and ultra-sensitive markets to any minor at the end of the day, minor impact on European ballots. And Wes we saw that constantly. And it's a new world. It's a new world for Europe, for certain, and for its European, for the European gas market

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 23:35

Absolutely. And Laurence, you've been covering global and European, of course coal markets for many years. Are we, what, what's happening in terms of coal burn in Europe? Are we really, is it really massively reduced and are we on track to basically phase out that, that fossil fuel from power generation on the continent and also in, in the UK?

Laurence Walker, Deputy Editor-in-Chief: 23:55

Yes. I think suddenly we're seeing a lot of reduction in cold usage. Certainly in terms of imports as well. So for example, this year I think we're gonna be looking at possibly around a 40 more than a 40, 40% drop in thermal coal imports to Europe. This is down quite substantially. So we are, we're looking at, 40 million tons compared with, over 70 million tons last year. Of course, last year it was more, there, there's more of a rush and a panic to buy lots of coal and secure coal because we weren't unsure what the situation was going to be with gas. Where we obviously we are gonna reduce the amount of Russian gas that we're getting a lot less Russian gas. But were we gonna find alternative sources? As, as Andreas has mentioned, yes, we have, we've managed to find lots of LNG. We've. We've had more in Norway, we've had more alternative origins, so we haven't really needed this coal so much. And as I mentioned before we began the year with massive stocks. These stocks are still fairly substantial now even going into winter and. Yes, we will be using coal. At the same time we'll be using less. The UK, for example, next year is gonna close. Its last, or Britain's gonna close its last plant. So the Ratcliff plant. So there will be perhaps a heightened dependence on gas in the interim, but certainly less coal being burned. And less coal being consumed and less reliance on it. And we have, we've managed to go from substantial volumes of Russian coal, Russian coal being the main supplier to Europe, to zero Russian coal now since August last year due to the sanctions. And it hasn't been a problem. In fact, we've seen, or we are seeing probably reductions in coal imports from every origin this year to Europe. Which kind of shows how. How much we have reduced our reliance on that

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 25:37

no, it's and I think as, as far as Andreas is talking about the demand destruction, that's certainly been the case of industry up to 15, 20% reduction in gas use. We're seeing an increasing reliance on that fuel because of we're burning less coal. Wouldn't that be fair to say as well Laurence?

Laurence Walker, Deputy Editor-in-Chief: 25:54

Yes. Certainly if you look at the historical data as well where, seen a rise in, in, in gas usage over the past decades, something in Europe. Yes. It's being used as a fuel that's using as a transitional fuel, you could say, or as a base load fuel. While we're. Reducing our reliance on the slightly dirt stuff like coal. But yes, ultimately, coals all the way out and over in a decade or two, possibly gas will be facing a similar trajectory.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 26:18

That's yeah, that of course remains to be seen in the first part of this episode. We talked a lot bit about what's happening in Germany and, the need to build out up to 25 gigawatts of new gas fired capacity, which is enormous. But Andres, if we turn to 2024 what do you think would be the key issues?

Andres Cala, LNG Correspondent: 26:36

I think we're it's gonna look very similar to 2023. For no other reason that fundamentally we're in the same shape. We're still very tight. There is not a lot of production coming online in terms of l and g. There we expect Norway to. To sustain. It's it's robust pipeline supply. Same with Algeria and even Russia although it comes into question, but so the structurally we're in, in, in pretty much very similar position. It's except I think gas will become, even, will further evolve into a global commodity. And what do I mean with that? Geopolitics is gonna keep driving prices all over the place. We'll see. The war in, or the turmoil in the Middle East is far from over. Will, we can still expect, it's a lot of surprises. Some analysts expect the war to last well into spring and beyond. And that's without any escalation. As I mentioned before, there's gonna be Russian surprises. Are we is Europe gonna sanction Russian, LNG? Are we gonna limit Russian gas ports that remains to be seen? And then it's a country decision. It becomes a member country decision now, but that remains to be seen. And Russia could also do it unilaterally. It certainly has intent and has motive to do it. So all that remains in the crystal ball to be seen next year. There's always infrastructure issues. Let's remember Freeport earlier this year, it only came back. It was out for almost a year, but that's when really when prices. Fell in the European Union. When Freeport came back online, there were several factors Norway of course, but it was an infrastructure region and an infrastructure driver. And this could, these disrupt disruptions could happen again anywhere. And the world is a global glass s our shared Sure, certainly sensitive enough. To yeah to stay on edge. To remain on edge over that. And then finally I think one of the key issues is what happens in November, 2024, we have US elections, and that is gonna change the dynamic geopolitically and in every other way. Quite significant. That will also be a driver for go for global gas markets not just in 2024, but beyond.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 28:52

Absolutely. Andres as I think that's quite key. We've seen as we talk, the disqualification of Donald Trump, we'll see how that's develops in Colorado. But there's one area which I'd also want to ask you about Andres. And that's, asian demand for LNG. We've seen that being quite muted so far, but is that expected to come back in 2024?

Andres Cala, LNG Correspondent: 29:11

It's it's the analogous to is cold gonna come back? We'll, we've been lucky to have to, to very mild winters and that's the only reason we were also able to balance the European gas system because we were able to store a lot of gas and thanks to two consecutive mild winters. It's, as I said, it's analogous to Chinese especially, but Asian demand in general, but Chinese specifically. Will it come back? Sure. I mean that, that's what we've all been anticipating and we just don't know when it's gonna happen. And I don't think there's a lot of clarity of of when, but it will happen. Asia as a whole will come back. Demand is increasing the number of contracts that will be that, that will start the. Delivering into Asia are increasing year on year. So the there the market can only further tighten even, and that's without involving a cold winter or any disruption or anything. So Asia will come back and it will tighten the market further and we'll see really how europe manages to to compete in that scenario.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 30:18

Absolutely. And so Laurence what do you think what's your view of, the most important developments, market developments and policy for 2024?

Laurence Walker, Deputy Editor-in-Chief: 30:25

I'd certainly agree with everything that Andres said there. I think obviously Russia is gonna remain an elephant in the room, perhaps a small elephant, and then in past, but certainly an elephant. I think we have, for example, the, there, there's certain points. Obviously the restocking is gonna be very important. So I think we have a dead I think a target of around 45% across Europe by February or so. So obviously once we get to February, we'll be able to see a little bit of a marker of where we've got to and what the what the outlook is gonna be from there. In terms of rush, we have the. The, their transit agreement by Ukraine is gonna expire in December. So that's something I'm guessing there's gonna be talk about certainly, will they renew it? Probably the chances are they won't. But if they don't, do we need it? So will we have reduced demand enough not to need that supply, which accounts to maybe 5% of our supply at present? If not, will they redirect it elsewhere? So there's, I think there'll be, talk about that. That'll be, that, that'll be an interesting area. And then just in terms of. Yeah, just the general shenanigans. Will there be more and more disruptions? Will there be increases? Will there be sabotage again? Will there be these to the points? I think there'll be that level of uncertainty related to. Russia, certainly. And then as Andreas was saying, it's gonna be the age old issues of what the weather is doing, what's what people are how much people need the power. Yes. And obviously you, we have the ongoing issues in the Middle East. Will this escalate further. That's gonna certainly be a key point to account for. And yes I'd say those are probably some main, the main issues really.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 32:02

So I think if I could judge from what you're saying here, gentlemen, that it's gonna be another very busy period for you and for Montel News in general, what we need to cover in the months ahead.

Laurence Walker, Deputy Editor-in-Chief: 32:11

There's potential for a lot of wild cards still. I think a lot of things that could be thrown into the mix that are unsu, the take us by surprise. So yes, it's gonna be a year. A year of keeping, keeping a close line.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 32:22

Laurence and Andres, thank you very much for being guests on the Montel Weekly podcast.