1
00:00:00,320 --> 00:00:03,080
Speaker 1: This is Dana Perkins and you're listening to Switched on

2
00:00:03,440 --> 00:00:06,760
Speaker 1: the B and EF podcast. When we think about commodities

3
00:00:06,840 --> 00:00:10,400
Speaker 1: like liquefied natural gas, we often immediately go to the

4
00:00:10,520 --> 00:00:13,200
Speaker 1: near term and we think about prices and trading. Now,

5
00:00:13,200 --> 00:00:16,040
Speaker 1: there's certainly plenty to watch in this space. Right now,

6
00:00:16,360 --> 00:00:18,919
Speaker 1: the world is keeping an eye on recent developments with

7
00:00:19,079 --> 00:00:23,000
Speaker 1: dark fleets containing LNG from sanctioned terminals, and in the

8
00:00:23,040 --> 00:00:26,360
Speaker 1: recent past, there have been fluctuations in energy prices over

9
00:00:26,400 --> 00:00:29,240
Speaker 1: the past few years as the world has responded very

10
00:00:29,280 --> 00:00:32,199
Speaker 1: quickly to changes in supply. But let's also take a

11
00:00:32,200 --> 00:00:35,080
Speaker 1: moment to look out a little further to twenty thirty.

12
00:00:35,440 --> 00:00:38,440
Speaker 1: With LNG tankers out in our oceans ready to be

13
00:00:38,520 --> 00:00:42,920
Speaker 1: responsive to demand around the world. This increasingly global marketplace

14
00:00:43,200 --> 00:00:46,000
Speaker 1: is an integral part of the energy system that shows

15
00:00:46,040 --> 00:00:48,640
Speaker 1: no signs of slowing down, or at least not this decade.

16
00:00:48,920 --> 00:00:51,479
Speaker 1: From the list of new terminals poised to be added

17
00:00:51,600 --> 00:00:54,280
Speaker 1: in the US to how China plans to meet their demand,

18
00:00:54,480 --> 00:00:56,960
Speaker 1: our show today is going to take you around the world.

19
00:00:57,320 --> 00:01:01,280
Speaker 1: Today we draw from two pieces of research. Bnaf's Global

20
00:01:01,440 --> 00:01:05,400
Speaker 1: LNG Market Outlook twenty thirty focus on supply risks as

21
00:01:05,440 --> 00:01:09,600
Speaker 1: well as the global LNG supply outlook second US wave coming.

22
00:01:09,880 --> 00:01:13,319
Speaker 1: Our guest is Fausio Marzuki, global head of Gas Markets

23
00:01:13,360 --> 00:01:15,680
Speaker 1: at BNF, and she is based in the shipping hub

24
00:01:15,720 --> 00:01:19,040
Speaker 1: of Singapore. I'm also joined today by co host Tom

25
00:01:19,120 --> 00:01:21,640
Speaker 1: Rowlands Reese from our New York office and I join

26
00:01:21,720 --> 00:01:24,440
Speaker 1: you as always from London. If you like our show

27
00:01:24,520 --> 00:01:26,479
Speaker 1: and you want other people to be able to find it,

28
00:01:26,680 --> 00:01:28,800
Speaker 1: give us a review or download it wherever you get

29
00:01:28,800 --> 00:01:31,520
Speaker 1: your podcasts. B and EF subscribers will be able to

30
00:01:31,600 --> 00:01:34,520
Speaker 1: find the two research notes I referenced at bn EF

31
00:01:34,640 --> 00:01:37,800
Speaker 1: go on the Bloomberg terminal or at BNF dot com.

32
00:01:37,880 --> 00:01:40,480
Speaker 1: But right now, let's jump into our conversation about what

33
00:01:40,600 --> 00:01:54,080
Speaker 1: to expect in the world of LNG with Fowls. Fowls,

34
00:01:54,080 --> 00:01:55,920
Speaker 1: thank you so much for joining as a guest on

35
00:01:55,960 --> 00:01:56,640
Speaker 1: the show today.

36
00:01:57,000 --> 00:01:58,600
Speaker 2: Thanks for having me, Dana.

37
00:01:58,680 --> 00:02:01,160
Speaker 1: And we've got Tom the other as our co host,

38
00:02:01,480 --> 00:02:04,880
Speaker 1: Thanks Diana. So we're going to talk about what's happening

39
00:02:05,080 --> 00:02:07,960
Speaker 1: in the global gas markets. And this is really off

40
00:02:07,960 --> 00:02:09,560
Speaker 1: the back of a report that we put out that

41
00:02:09,720 --> 00:02:12,520
Speaker 1: is a global gas Outlook out to twenty thirty and

42
00:02:12,639 --> 00:02:15,000
Speaker 1: I am going to just before we get into what's

43
00:02:15,040 --> 00:02:17,720
Speaker 1: actually inside that report, pretending like I don't know what's

44
00:02:17,760 --> 00:02:20,720
Speaker 1: in there. I'm going to challenge the fundamental premise of

45
00:02:20,960 --> 00:02:24,760
Speaker 1: a global gas outlook, because really my understanding of gas

46
00:02:24,760 --> 00:02:27,639
Speaker 1: has been that it's a lot of kind of very

47
00:02:27,680 --> 00:02:28,560
Speaker 1: regional markets.

48
00:02:28,639 --> 00:02:28,760
Speaker 2: Right.

49
00:02:28,760 --> 00:02:32,720
Speaker 1: These are physical pipelines connecting gas supply to gas demand.

50
00:02:32,960 --> 00:02:36,080
Speaker 1: And you know, I'm sitting here in Europe, Fousier in Singapore.

51
00:02:36,200 --> 00:02:40,760
Speaker 1: These are physical terminals. And I know we're increasingly seeing

52
00:02:40,800 --> 00:02:43,720
Speaker 1: ships carrying LNG across the world, But how much has

53
00:02:43,840 --> 00:02:48,919
Speaker 1: that made for a more global versus historically regional market

54
00:02:48,919 --> 00:02:51,240
Speaker 1: and how is that maybe changing? And is it even

55
00:02:51,280 --> 00:02:52,880
Speaker 1: possible to do a global gas outlook?

56
00:02:52,880 --> 00:02:54,560
Speaker 3: Well, Jean did it, and I'm really proud of this,

57
00:02:55,280 --> 00:02:57,639
Speaker 3: so we can do a global gas outlook. The thing

58
00:02:57,639 --> 00:03:00,880
Speaker 3: about the global gas markets or any lowobal market, what

59
00:03:01,080 --> 00:03:04,800
Speaker 3: market really is truly global if it's just not a

60
00:03:04,840 --> 00:03:07,560
Speaker 3: bunch of regional markets that are pieced together.

61
00:03:07,840 --> 00:03:08,720
Speaker 2: It's just more.

62
00:03:08,560 --> 00:03:11,840
Speaker 3: About how interconnected they are. And look of why natural

63
00:03:11,840 --> 00:03:14,799
Speaker 3: gas has been doing that over the years. Yes, previously

64
00:03:14,919 --> 00:03:18,440
Speaker 3: a European gas analyst didn't need to know a thing

65
00:03:18,840 --> 00:03:21,840
Speaker 3: about Japanese nuclear restart timelines.

66
00:03:21,960 --> 00:03:25,119
Speaker 2: It just wasn't a thing, But now global energy.

67
00:03:24,919 --> 00:03:28,639
Speaker 3: Is absolutely piecing one of that together. Whether a true

68
00:03:28,720 --> 00:03:34,480
Speaker 3: global gas market exists, eh, a number of very interconnected

69
00:03:34,920 --> 00:03:39,720
Speaker 3: regional gas markets with LNG does in fact exist.

70
00:03:40,080 --> 00:03:43,960
Speaker 4: Can I just ask you mentioned that you didn't say

71
00:03:44,000 --> 00:03:46,920
Speaker 4: that the analyst in Europe didn't need to worry about

72
00:03:47,240 --> 00:03:50,120
Speaker 4: Japanese nuclear restart times. So for those of us not

73
00:03:50,120 --> 00:03:52,280
Speaker 4: familiar with this market, well, what has changed since then?

74
00:03:52,800 --> 00:03:57,000
Speaker 3: Lots and lots of LNG coming to Europe and also

75
00:03:57,200 --> 00:04:00,880
Speaker 3: the fact that with what happened in the crisis is

76
00:04:00,880 --> 00:04:03,280
Speaker 3: that we're finding ourselves in a situation where the gas

77
00:04:03,320 --> 00:04:08,880
Speaker 3: markets are hyper sensitive to anything, any supply disruption, anything

78
00:04:08,880 --> 00:04:12,520
Speaker 3: that can change the flow of gas globally. We're getting

79
00:04:12,520 --> 00:04:15,160
Speaker 3: a lot of knee jerk reactions things that don't even

80
00:04:15,200 --> 00:04:19,560
Speaker 3: have anything to do with the European gas market. Say

81
00:04:19,800 --> 00:04:24,000
Speaker 3: a plant outage in the middle of Borneo, suddenly European

82
00:04:24,040 --> 00:04:26,840
Speaker 3: gas prices move. I can assure you it's got nothing

83
00:04:26,880 --> 00:04:29,520
Speaker 3: to do with Malaysian LNG output.

84
00:04:29,839 --> 00:04:31,160
Speaker 2: But because of.

85
00:04:31,080 --> 00:04:34,880
Speaker 3: The interconnectivity of all of these markets now through LNG,

86
00:04:35,680 --> 00:04:38,120
Speaker 3: because it's so commoditized, because it moves so freely now

87
00:04:38,160 --> 00:04:39,920
Speaker 3: and so quickly it actually.

88
00:04:39,560 --> 00:04:40,880
Speaker 2: Has those impacts.

89
00:04:40,880 --> 00:04:44,280
Speaker 3: So today that is why a lot of times when

90
00:04:44,320 --> 00:04:47,800
Speaker 3: the European gas traders are talking to the analysts and APEC,

91
00:04:48,040 --> 00:04:50,159
Speaker 3: that's exactly what they want to know. They want to

92
00:04:50,200 --> 00:04:53,359
Speaker 3: know nuclear restart timelines. And it's a really different gas

93
00:04:53,400 --> 00:04:54,719
Speaker 3: market that we're dealing with today.

94
00:04:55,120 --> 00:04:58,159
Speaker 4: That's interesting because I had a slightly different understanding, which

95
00:04:58,320 --> 00:05:00,640
Speaker 4: that it was just more to do with like physical

96
00:05:00,680 --> 00:05:04,160
Speaker 4: capacity to import and export from different countries had increased.

97
00:05:04,200 --> 00:05:06,760
Speaker 4: But what you're saying is actually the real crystallization is

98
00:05:06,800 --> 00:05:10,200
Speaker 4: the sort of the change in the politics it is.

99
00:05:10,480 --> 00:05:14,160
Speaker 3: But yes, absolutely so, there is more LNG in the

100
00:05:14,200 --> 00:05:17,040
Speaker 3: world today. There is more import capacity, there is more

101
00:05:17,080 --> 00:05:20,520
Speaker 3: supply capacity, so there's a lot more lengy going around.

102
00:05:20,680 --> 00:05:24,680
Speaker 3: So everybody is starting to get impacted by LNG to

103
00:05:24,720 --> 00:05:29,000
Speaker 3: a certain extent. So that's why more and more regions,

104
00:05:29,000 --> 00:05:32,039
Speaker 3: more and more gas markets are being hyper sensitive to

105
00:05:32,080 --> 00:05:34,960
Speaker 3: the LNG market. Now. The situation that we're finding ourselves

106
00:05:35,040 --> 00:05:38,600
Speaker 3: in today is sort of at the crux of it all,

107
00:05:38,800 --> 00:05:42,240
Speaker 3: just the change in Europe's situation that it is now

108
00:05:42,320 --> 00:05:46,080
Speaker 3: taking in more LNG than it used to, and that's

109
00:05:46,560 --> 00:05:49,159
Speaker 3: changing the dynamics a little bit, but there are other

110
00:05:49,160 --> 00:05:53,480
Speaker 3: things changing that dynamics too. I'll take a Brazil for example.

111
00:05:53,760 --> 00:05:57,600
Speaker 3: When it's hot, there's a drought, you have less hydropower.

112
00:05:57,960 --> 00:05:59,120
Speaker 2: The first thing they go.

113
00:05:59,040 --> 00:06:02,760
Speaker 3: For is local fininatural gas. You look at emerging Asian

114
00:06:02,839 --> 00:06:08,080
Speaker 3: markets like Thailand, Pakistan, Bangladesh. These are countries that have

115
00:06:08,120 --> 00:06:13,120
Speaker 3: built their entire economies built on domestic gas resources that

116
00:06:13,160 --> 00:06:16,960
Speaker 3: they produce locally cheaply consumed internally. They are now in

117
00:06:17,000 --> 00:06:20,200
Speaker 3: a phase of growth that they've run out of that

118
00:06:20,360 --> 00:06:22,320
Speaker 3: gas and they need to import.

119
00:06:22,560 --> 00:06:22,800
Speaker 2: Now.

120
00:06:23,400 --> 00:06:27,080
Speaker 3: These countries are now increasingly being exposed to the international

121
00:06:27,240 --> 00:06:29,080
Speaker 3: LNG market, and hence.

122
00:06:28,839 --> 00:06:31,760
Speaker 2: Why there's just sort of a lot more.

123
00:06:31,640 --> 00:06:35,560
Speaker 3: People in this market now, and hence why lots of

124
00:06:35,600 --> 00:06:39,360
Speaker 3: things can actually change prices, change trade flows, and change

125
00:06:39,800 --> 00:06:41,400
Speaker 3: the way things know, the way things move.

126
00:06:41,920 --> 00:06:44,680
Speaker 1: And it's absolute simplest sense. LERNG means that we're able

127
00:06:44,720 --> 00:06:47,440
Speaker 1: to actually put natural gas on chips and get it

128
00:06:47,440 --> 00:06:49,960
Speaker 1: to other parts of the world. And the question really

129
00:06:50,040 --> 00:06:53,359
Speaker 1: lies in how quickly we can actually change the supply

130
00:06:53,520 --> 00:06:56,000
Speaker 1: to parts of the world in order to meet changes

131
00:06:56,040 --> 00:06:59,560
Speaker 1: in demand or change fluctuations in prices. How quickly I

132
00:06:59,600 --> 00:07:02,960
Speaker 1: know you're saying that the prices move almost instantaneously, But

133
00:07:03,040 --> 00:07:07,320
Speaker 1: how quickly is the market able to then rectify that balance, Call.

134
00:07:07,240 --> 00:07:09,160
Speaker 3: A captain of the ship and tell them to turnaround.

135
00:07:09,320 --> 00:07:12,840
Speaker 3: That's how quick it moves. The l and Gury community,

136
00:07:13,360 --> 00:07:16,080
Speaker 3: believe it or not, is actually still quite a tight

137
00:07:16,160 --> 00:07:20,200
Speaker 3: knit community, especially sort of really big players in terms

138
00:07:20,200 --> 00:07:22,320
Speaker 3: of who really moves a lot of the volumes and

139
00:07:22,360 --> 00:07:26,280
Speaker 3: who's actually got those sort of nimble fleets and flexibility

140
00:07:26,280 --> 00:07:29,040
Speaker 3: of supply that can actually meet this sort of really

141
00:07:29,160 --> 00:07:33,480
Speaker 3: quick demand turnaround. So in terms of rewiring trade flows,

142
00:07:33,520 --> 00:07:36,960
Speaker 3: that can actually happen pretty quickly. Where we look at

143
00:07:37,600 --> 00:07:39,760
Speaker 3: what's been going on in the Middle East where cuts

144
00:07:39,760 --> 00:07:42,680
Speaker 3: are used to use the Suez Canal to basically send

145
00:07:42,720 --> 00:07:48,240
Speaker 3: everything to Europe very easily, I mean, perhaps more costiclying

146
00:07:48,640 --> 00:07:53,280
Speaker 3: overnight can reroute just around Africa to get to Europe,

147
00:07:53,320 --> 00:07:56,720
Speaker 3: and that trade flow changes as soon as the market

148
00:07:56,840 --> 00:07:59,760
Speaker 3: needs it to, and it can respond quickly in that.

149
00:08:00,320 --> 00:08:00,880
Speaker 2: Now, of course it.

150
00:08:00,840 --> 00:08:04,200
Speaker 3: Impacts margins and probitability timing, et cetera, et cetera, but

151
00:08:04,400 --> 00:08:07,400
Speaker 3: the market carry acts very quickly. Now, prices will react

152
00:08:07,520 --> 00:08:13,240
Speaker 3: usually faster, but it is a highly liquid and commoditized

153
00:08:13,240 --> 00:08:15,880
Speaker 3: market now that it can actually supply.

154
00:08:15,800 --> 00:08:19,520
Speaker 2: To where you know, whenever there's a demand or fall

155
00:08:19,640 --> 00:08:19,960
Speaker 2: like that.

156
00:08:20,200 --> 00:08:23,560
Speaker 4: So this is why short term gas traders always have

157
00:08:23,760 --> 00:08:26,240
Speaker 4: like a map on their screen with loads of pictures

158
00:08:26,240 --> 00:08:28,680
Speaker 4: of boats going around. It's not just because it looks cool.

159
00:08:28,720 --> 00:08:31,960
Speaker 2: It's like, I don't like it when you say boats, tom.

160
00:08:31,960 --> 00:08:33,880
Speaker 1: Okay, ships, tankers?

161
00:08:34,679 --> 00:08:37,000
Speaker 2: What is the favorite word goods?

162
00:08:37,080 --> 00:08:41,920
Speaker 3: Yes at that ships is acceptable, ships is acceptible.

163
00:08:43,440 --> 00:08:43,680
Speaker 2: Okay.

164
00:08:43,760 --> 00:08:45,960
Speaker 1: So some of the gas that is very much not

165
00:08:46,120 --> 00:08:49,880
Speaker 1: on a ship or a tanker are these physical pipelines

166
00:08:49,920 --> 00:08:54,200
Speaker 1: that are here in Europe. And speaking from my context,

167
00:08:54,240 --> 00:08:56,440
Speaker 1: I'm very much thinking about the energy crisis and what

168
00:08:56,559 --> 00:08:59,360
Speaker 1: happened with prices in Europe not that long ago. So

169
00:08:59,400 --> 00:09:02,280
Speaker 1: a couple of years ago, when the war in Ukraine

170
00:09:02,400 --> 00:09:05,000
Speaker 1: initially started, there were sanctions that were then placed on

171
00:09:05,360 --> 00:09:08,840
Speaker 1: Russian leng and that changed the prices pretty dramatically, not

172
00:09:08,960 --> 00:09:11,240
Speaker 1: just here in Europe but around the world. And these

173
00:09:11,360 --> 00:09:15,240
Speaker 1: tankers did then start to reroute. And we're finding out

174
00:09:15,240 --> 00:09:17,800
Speaker 1: now that there is talk of possibly further sanctions on

175
00:09:17,880 --> 00:09:22,080
Speaker 1: Russian energy. What impact would this have And given that

176
00:09:22,120 --> 00:09:24,520
Speaker 1: we're now in some respects seeing this coming is it

177
00:09:24,559 --> 00:09:26,960
Speaker 1: going to have. Is it going to cause less disruption

178
00:09:27,080 --> 00:09:30,280
Speaker 1: or is it really when you shut down the access

179
00:09:30,320 --> 00:09:33,280
Speaker 1: to some of that gas, is that actually just it's

180
00:09:33,320 --> 00:09:35,400
Speaker 1: inevitable that it's going to have a global impact.

181
00:09:35,679 --> 00:09:40,320
Speaker 3: Absolutely, So that's a really interesting question, Dana. And would

182
00:09:40,400 --> 00:09:43,960
Speaker 3: it interest anybody to know that Russian leg is still

183
00:09:44,080 --> 00:09:48,560
Speaker 3: the second largest source of LNG into Western Europe.

184
00:09:48,720 --> 00:09:49,400
Speaker 2: It still is.

185
00:09:49,679 --> 00:09:55,720
Speaker 3: That actually has not changed changed, So it's interesting dynamics here,

186
00:09:55,720 --> 00:09:58,520
Speaker 3: and I want to talk about the LNG plant sanctioned

187
00:09:58,600 --> 00:10:03,920
Speaker 3: story here. Russia energy is still coming into the European system,

188
00:10:04,040 --> 00:10:07,480
Speaker 3: that is, and actually we even saw an increase of

189
00:10:07,520 --> 00:10:11,439
Speaker 3: it happening in the last couple of months. Interestingly enough,

190
00:10:11,480 --> 00:10:15,160
Speaker 3: it's still coming into the system. That's very very unlikely

191
00:10:15,679 --> 00:10:19,680
Speaker 3: to change because it is such a fundamental supply source

192
00:10:19,800 --> 00:10:23,320
Speaker 3: into Europe right now. So some of the discussion has

193
00:10:23,360 --> 00:10:25,240
Speaker 3: been around, okay, well, how to be curbed some of that.

194
00:10:25,480 --> 00:10:28,360
Speaker 3: So there's been talks and sort of implementations of a

195
00:10:28,559 --> 00:10:32,959
Speaker 3: sanctioning parts of the operations. So what used to happen

196
00:10:33,040 --> 00:10:35,000
Speaker 3: a lot with Russian energy, and this is from the

197
00:10:35,120 --> 00:10:36,800
Speaker 3: Arctic and Yama projects.

198
00:10:36,840 --> 00:10:38,240
Speaker 2: They used to come down to Europe.

199
00:10:38,240 --> 00:10:40,640
Speaker 3: They used to either come to either a Belgian or

200
00:10:40,679 --> 00:10:43,719
Speaker 3: a French termin Now they used to offload their cargo

201
00:10:44,040 --> 00:10:46,640
Speaker 3: and transfer it into another ship, and that other ship

202
00:10:46,640 --> 00:10:48,079
Speaker 3: would just actually go somewhere else.

203
00:10:48,320 --> 00:10:50,680
Speaker 2: They curbed that. They're like, okay, well you can't.

204
00:10:50,559 --> 00:10:54,280
Speaker 3: Use our facilities to transfer it to other markets now,

205
00:10:54,360 --> 00:10:57,480
Speaker 3: so they stop that, But they haven't actually stopped getting

206
00:10:57,600 --> 00:11:01,680
Speaker 3: Russian energy into the European system. It is very unlikely

207
00:11:01,720 --> 00:11:05,000
Speaker 3: to change, just because there's just too much dependency on

208
00:11:05,480 --> 00:11:10,079
Speaker 3: that Russian leg. In the event, Europe says I do

209
00:11:10,120 --> 00:11:12,760
Speaker 3: not want to take a single drop of Russian gas,

210
00:11:12,800 --> 00:11:15,800
Speaker 3: be it in pipeline form or LNG. Ever again, yep,

211
00:11:15,920 --> 00:11:20,080
Speaker 3: sure that Russian supply could be diverted to other markets

212
00:11:20,120 --> 00:11:23,760
Speaker 3: that are willing to take it and who would feel

213
00:11:23,800 --> 00:11:27,400
Speaker 3: the void in Europe. A lot can the Qataris can

214
00:11:27,440 --> 00:11:31,000
Speaker 3: fill that. West Africa can fill that. At a future

215
00:11:31,240 --> 00:11:34,480
Speaker 3: point in time. East Africa can fill that.

216
00:11:35,120 --> 00:11:36,720
Speaker 2: A little bit of Mexico a little bit.

217
00:11:37,040 --> 00:11:39,640
Speaker 3: You know, it will take longer, but things that usually

218
00:11:39,679 --> 00:11:41,880
Speaker 3: go to Asia could go there all.

219
00:11:41,960 --> 00:11:43,200
Speaker 2: Quite frankly, you will.

220
00:11:43,000 --> 00:11:44,920
Speaker 3: Just actually by that point have a lot of guest

221
00:11:44,920 --> 00:11:47,840
Speaker 3: demand destructing that they might not need the LERG anymore.

222
00:11:47,920 --> 00:11:51,600
Speaker 3: But so where might that Russian llergy go. It's been

223
00:11:51,640 --> 00:11:56,040
Speaker 3: really interesting to see what's emerged in the market is

224
00:11:56,120 --> 00:12:00,720
Speaker 3: the shadow fleet for Russian LERG. So what's happened is

225
00:12:00,840 --> 00:12:04,920
Speaker 3: there's been one LNG project that is subject sanctions and

226
00:12:05,520 --> 00:12:09,760
Speaker 3: two ships have actually loaded this plant. And our colleagues

227
00:12:09,760 --> 00:12:11,600
Speaker 3: a bloom Book News have done a fantastic job of

228
00:12:11,640 --> 00:12:13,560
Speaker 3: reporting on this. I know for a fact, you know

229
00:12:13,880 --> 00:12:16,280
Speaker 3: pour some of them they're on holiday while they're try

230
00:12:16,320 --> 00:12:19,360
Speaker 3: to break this story. But so the world is watching

231
00:12:19,400 --> 00:12:23,560
Speaker 3: where these shipments, where these tankers actually might end up,

232
00:12:23,600 --> 00:12:28,520
Speaker 3: and who's willing to actually buy this supply given the

233
00:12:28,520 --> 00:12:29,360
Speaker 3: same shows on them.

234
00:12:29,520 --> 00:12:31,840
Speaker 1: So when it comes to this shadow fleet, these tankers

235
00:12:31,880 --> 00:12:33,960
Speaker 1: are out there with LNG. You can see them on

236
00:12:34,000 --> 00:12:36,920
Speaker 1: the map that people are watching on their screens. You know,

237
00:12:36,960 --> 00:12:40,160
Speaker 1: the traders that Tom had referenced at the point of

238
00:12:40,600 --> 00:12:42,920
Speaker 1: recording this show. We don't know where they're headed, but

239
00:12:42,920 --> 00:12:43,720
Speaker 1: where are they now?

240
00:12:44,080 --> 00:12:47,439
Speaker 3: So the two shadow LNG vessels that have actually presumably

241
00:12:47,520 --> 00:12:50,520
Speaker 3: loaded at the Arctic LNG two plant. The station plants

242
00:12:50,520 --> 00:12:54,480
Speaker 3: are the Pioneer and the US Energy. And for those

243
00:12:54,520 --> 00:12:58,000
Speaker 3: of you Bloomberg terminal uses, you can actually see that

244
00:12:58,240 --> 00:13:01,319
Speaker 3: in IMO and just go to map. So let's see

245
00:13:01,760 --> 00:13:05,400
Speaker 3: just such a curiosity day nuts from seeing where those

246
00:13:05,440 --> 00:13:08,439
Speaker 3: ships are actually now. So but the problem is the

247
00:13:08,520 --> 00:13:10,480
Speaker 3: thing about a shadow fleet, the thing about a dart

248
00:13:11,040 --> 00:13:15,200
Speaker 3: is just that they will spoof their location, right. It's

249
00:13:15,600 --> 00:13:18,000
Speaker 3: because they know the whole world's watching. So this is

250
00:13:18,120 --> 00:13:21,560
Speaker 3: actually sort of like tinkering with the transponder or just

251
00:13:21,600 --> 00:13:24,679
Speaker 3: turning it off to actually sort of give false locations.

252
00:13:24,760 --> 00:13:27,960
Speaker 3: And the only way that our report is and sort

253
00:13:27,960 --> 00:13:32,840
Speaker 3: of the market was able to actually realize where these

254
00:13:32,840 --> 00:13:35,080
Speaker 3: ships were and what these ships were doing was actually

255
00:13:35,080 --> 00:13:39,320
Speaker 3: through proper satellite imagery and actually sort of matching the

256
00:13:39,520 --> 00:13:42,080
Speaker 3: view of that ship, like what that ship looked like

257
00:13:42,200 --> 00:13:45,080
Speaker 3: looking at databases, because you know, they're painting over the numbers,

258
00:13:45,080 --> 00:13:48,559
Speaker 3: they're changing the name, they're changing the color, they're doing

259
00:13:48,600 --> 00:13:51,319
Speaker 3: all of that just to kind of bypass all of this.

260
00:13:51,520 --> 00:13:55,320
Speaker 3: So they were, you know, they was still look like

261
00:13:55,480 --> 00:14:00,800
Speaker 3: they were around Europe. But it seems like they're probably

262
00:14:00,800 --> 00:14:03,240
Speaker 3: going to find an Asian buyer. I think it's going

263
00:14:03,320 --> 00:14:06,160
Speaker 3: to be really unlikely that a European buyer would be

264
00:14:06,160 --> 00:14:09,160
Speaker 3: willing to risk something like that. They're probably going to

265
00:14:09,200 --> 00:14:10,920
Speaker 3: come out east, They're probably going to take a really

266
00:14:11,000 --> 00:14:13,640
Speaker 3: long journey around that and quite frankly, it might even

267
00:14:13,679 --> 00:14:16,520
Speaker 3: it might even be they might not even officially dock

268
00:14:16,600 --> 00:14:18,760
Speaker 3: that car. But there's a lots of things can actually happen.

269
00:14:18,840 --> 00:14:21,400
Speaker 3: And sorry, we're getting into the We're getting into.

270
00:14:21,440 --> 00:14:23,840
Speaker 2: The dark side. It is fascinating.

271
00:14:24,160 --> 00:14:26,360
Speaker 4: I'm gonna say that the scope of things, I mean

272
00:14:26,400 --> 00:14:29,080
Speaker 4: that you've already talked about, like drought in Brazil and

273
00:14:29,120 --> 00:14:32,080
Speaker 4: then Russian ships painting over there thing.

274
00:14:32,280 --> 00:14:34,800
Speaker 1: And I'm just picturing James Bond being very much involved

275
00:14:34,800 --> 00:14:37,960
Speaker 1: in this right now. Not relevant to these specific ships.

276
00:14:38,040 --> 00:14:40,040
Speaker 1: Can you talk a little bit about where the largest

277
00:14:40,080 --> 00:14:42,480
Speaker 1: source of demand is at this point time and as

278
00:14:42,520 --> 00:14:45,400
Speaker 1: we look into the future in this global out to

279
00:14:45,480 --> 00:14:48,560
Speaker 1: twenty thirty market outlook that we've done, you know, where

280
00:14:48,560 --> 00:14:50,840
Speaker 1: are we seeing really growing demand on what country is

281
00:14:50,880 --> 00:14:53,840
Speaker 1: really really taking gas on board as a part of

282
00:14:53,840 --> 00:14:55,360
Speaker 1: their energy system.

283
00:14:55,800 --> 00:15:01,800
Speaker 3: China trying to tread is anything not a China answer? No,

284
00:15:02,120 --> 00:15:05,160
Speaker 3: So China, we're looking at the biggest energy market now

285
00:15:05,320 --> 00:15:06,560
Speaker 3: taking the ground away from Japan.

286
00:15:06,880 --> 00:15:10,560
Speaker 2: Europe book is really really.

287
00:15:10,240 --> 00:15:13,400
Speaker 3: Stepping up in terms of how much energy as a

288
00:15:13,440 --> 00:15:19,000
Speaker 3: block pulling now so in the immediate couple years, you're

289
00:15:19,040 --> 00:15:22,560
Speaker 3: going to see Europe taking a lot more energy because

290
00:15:22,880 --> 00:15:26,320
Speaker 3: of this sort of displacement of Russian pipeline gas. But

291
00:15:26,440 --> 00:15:29,480
Speaker 3: you know that's getting replaced by Norwegian contracts to come

292
00:15:29,480 --> 00:15:31,840
Speaker 3: into the continent and a number of other things, and

293
00:15:31,920 --> 00:15:35,200
Speaker 3: sort of industries switching away from gas trying to curb

294
00:15:35,280 --> 00:15:37,560
Speaker 3: that demand, and of course sort of the energy transition

295
00:15:37,720 --> 00:15:40,480
Speaker 3: more broadly. But the thing about Europe is just that

296
00:15:40,520 --> 00:15:44,360
Speaker 3: a lot of it is coming from just the turned

297
00:15:44,400 --> 00:15:48,320
Speaker 3: down of call or retirements of retirements of nucleus of

298
00:15:48,400 --> 00:15:50,440
Speaker 3: gas is really just kind of coming into the system

299
00:15:50,560 --> 00:15:54,080
Speaker 3: in order to fill that void until other cleaner sources

300
00:15:54,080 --> 00:15:56,640
Speaker 3: of energy come into the mix. And it's a similar

301
00:15:56,680 --> 00:15:59,640
Speaker 3: story really in a number of other in a number

302
00:15:59,680 --> 00:16:02,520
Speaker 3: of other market So you're looking at China where they

303
00:16:02,600 --> 00:16:05,800
Speaker 3: are doing a lot of coal to gas switching in

304
00:16:05,920 --> 00:16:12,480
Speaker 3: the industry sector. With more urbanization, the grids and transmission

305
00:16:12,560 --> 00:16:17,480
Speaker 3: distribution lines are expanding further more people are consuming gas

306
00:16:17,520 --> 00:16:21,200
Speaker 3: for heating to a smaller degree. Power In China, it's

307
00:16:21,280 --> 00:16:23,120
Speaker 3: less of it, it's less of a story there just

308
00:16:23,160 --> 00:16:26,480
Speaker 3: because coal fire generation and renewable energy is just so

309
00:16:26,560 --> 00:16:29,640
Speaker 3: much cheaper then of course buying LNG sometimes and a

310
00:16:29,680 --> 00:16:32,360
Speaker 3: lot of the domestic gas production that was already being

311
00:16:32,440 --> 00:16:36,320
Speaker 3: used in China has already been used by their industrial heartland.

312
00:16:36,400 --> 00:16:38,720
Speaker 3: And let's not also forget that Russia does send pipeline

313
00:16:38,720 --> 00:16:41,680
Speaker 3: gas to China as well. So energy is actually what

314
00:16:41,720 --> 00:16:46,520
Speaker 3: we call a balancer in China's gas system. Let's call

315
00:16:46,560 --> 00:16:48,480
Speaker 3: it a bit of a pecking order. China will always

316
00:16:48,560 --> 00:16:51,840
Speaker 3: use its domestic production first, they'll use the pipeline gas

317
00:16:51,880 --> 00:16:55,800
Speaker 3: imports first from Central Asia and Russia, and then only it.

318
00:16:55,760 --> 00:16:56,760
Speaker 2: Takes in the air lergy.

319
00:16:57,120 --> 00:17:01,480
Speaker 3: So any variation in demand, you've got that that's going

320
00:17:01,520 --> 00:17:05,360
Speaker 3: to actually impact LNG. So when we think about Chinese

321
00:17:05,680 --> 00:17:11,240
Speaker 3: economy and fluctuation demand, whether sensitive demand, et cetera, et cetera, that.

322
00:17:11,280 --> 00:17:13,280
Speaker 2: Hits LNG more than anything.

323
00:17:13,520 --> 00:17:15,880
Speaker 3: Really not that different from sort of the big consuming

324
00:17:15,920 --> 00:17:17,160
Speaker 3: markets I grew up as well.

325
00:17:18,000 --> 00:17:21,719
Speaker 4: This is really interesting and because obviously when we come

326
00:17:21,760 --> 00:17:25,480
Speaker 4: to international energy trade there's always like a geopolitical dimension

327
00:17:25,520 --> 00:17:29,240
Speaker 4: to it, and so China's taking a lot of pipeline

328
00:17:29,280 --> 00:17:31,880
Speaker 4: gas from Russia and then it's also importing a lot

329
00:17:31,880 --> 00:17:35,080
Speaker 4: of LNG. And of course the US has just emerged

330
00:17:35,080 --> 00:17:38,359
Speaker 4: as globally the largest exporter of LNG, so I know

331
00:17:38,400 --> 00:17:40,520
Speaker 4: it's not the only exporter, but you know, you've got

332
00:17:40,640 --> 00:17:43,960
Speaker 4: gas coming from Russia, gas coming from the US. Good

333
00:17:43,960 --> 00:17:46,160
Speaker 4: to get just a sense of what is the volume

334
00:17:46,200 --> 00:17:48,960
Speaker 4: of gas coming from Russia compared to the volume of

335
00:17:49,240 --> 00:17:53,000
Speaker 4: LNG being imported into China. How dependent is China on

336
00:17:53,480 --> 00:17:55,720
Speaker 4: what Russia does versus what the US does.

337
00:17:56,520 --> 00:18:01,280
Speaker 3: So if we start thinking about proportionality and shares and

338
00:18:01,840 --> 00:18:08,760
Speaker 3: import dependency on particular countries, trade partners or a supply sources,

339
00:18:08,800 --> 00:18:13,640
Speaker 3: if you're like Europe was far more dependent on Russian

340
00:18:13,800 --> 00:18:22,520
Speaker 3: pipeline imports, then China is on imports. More broadly, domestic

341
00:18:22,720 --> 00:18:27,119
Speaker 3: production in China is still one hundred percent the line's

342
00:18:27,119 --> 00:18:31,040
Speaker 3: share of gas consumption in the country. It is still

343
00:18:31,320 --> 00:18:34,680
Speaker 3: the biggest portion. It meets the largest portion of demand.

344
00:18:34,840 --> 00:18:38,160
Speaker 3: So that is safe right that you know they have

345
00:18:38,480 --> 00:18:44,760
Speaker 3: state national oil companies that ensure domestic supply is at

346
00:18:45,000 --> 00:18:47,760
Speaker 3: the top levels and can sort of you're you're pushing

347
00:18:47,760 --> 00:18:50,200
Speaker 3: out as much in producing as much as you possibly

348
00:18:50,200 --> 00:18:52,919
Speaker 3: can to meet domestic consumption, and only then will they

349
00:18:52,960 --> 00:18:55,160
Speaker 3: go out into the internet off your markets for LNG

350
00:18:55,320 --> 00:19:00,399
Speaker 3: imports so in terms of a dependency, China is more

351
00:19:00,560 --> 00:19:03,720
Speaker 3: self sufficient and that's it. Europe is also an older

352
00:19:03,960 --> 00:19:08,040
Speaker 3: gas market. A lot of the natural resources in continential

353
00:19:08,080 --> 00:19:13,080
Speaker 3: Europe are depleted. You have less domestic gas in Europe itself,

354
00:19:13,119 --> 00:19:14,680
Speaker 3: and hence why it's had to rely on it.

355
00:19:14,720 --> 00:19:19,040
Speaker 4: What's so if I understand correctly what you're saying, because

356
00:19:19,160 --> 00:19:22,159
Speaker 4: I'm not so much asking about Europe because we know

357
00:19:22,200 --> 00:19:26,640
Speaker 4: what happened there, but China. You're saying the bulk of

358
00:19:26,840 --> 00:19:30,639
Speaker 4: gas consumed in China is produced domestically, and the amount

359
00:19:30,680 --> 00:19:33,680
Speaker 4: coming from Russia and the amount being imported as leng

360
00:19:33,920 --> 00:19:36,679
Speaker 4: is relatively little in the big scheme of things, So

361
00:19:36,840 --> 00:19:41,760
Speaker 4: they are somewhat in terms of gas resilient to whether

362
00:19:41,800 --> 00:19:44,000
Speaker 4: it's what Russia is doing or whether it's what the

363
00:19:44,080 --> 00:19:44,840
Speaker 4: US is doing.

364
00:19:45,080 --> 00:19:48,679
Speaker 3: They have options, yes, yes, and China, and China has

365
00:19:48,720 --> 00:19:52,479
Speaker 3: options absolutely because they also have a whole bunch of

366
00:19:52,720 --> 00:19:56,000
Speaker 3: Pacific leg that they rely on to got it.

367
00:19:56,440 --> 00:19:58,399
Speaker 4: And because you know, whenever we talk about China, we

368
00:19:58,440 --> 00:20:01,880
Speaker 4: have to also factor in the expected amount of growth.

369
00:20:02,320 --> 00:20:05,720
Speaker 4: Do you think growth in gas demand in China could

370
00:20:05,840 --> 00:20:09,000
Speaker 4: lead to more dependence on imported gas or is there

371
00:20:09,040 --> 00:20:12,640
Speaker 4: the capacity to scale up domestic production in China as well.

372
00:20:12,880 --> 00:20:17,600
Speaker 3: Less capacity to scale up domestic domestic production without getting

373
00:20:17,600 --> 00:20:19,760
Speaker 3: too expensive where you might as well go out and

374
00:20:19,760 --> 00:20:22,760
Speaker 3: buy LNG. So we are projecting growth and this is

375
00:20:22,800 --> 00:20:26,080
Speaker 3: coming from really all parts of all sectors. So a

376
00:20:26,119 --> 00:20:28,560
Speaker 3: little bit more empower, not as a guests by power

377
00:20:28,600 --> 00:20:32,600
Speaker 3: capacity is being built to especially in the industrial areas

378
00:20:32,720 --> 00:20:36,960
Speaker 3: I mentioned industrial coals gas switching. We're also looking at

379
00:20:37,040 --> 00:20:39,600
Speaker 3: more gas in the transport sector. This is coming from

380
00:20:39,760 --> 00:20:43,480
Speaker 3: heavy duty vehicles actually running on LNG instead of diesel

381
00:20:43,800 --> 00:20:48,000
Speaker 3: chemical sector as a feedstock. So sort of all parts

382
00:20:48,119 --> 00:20:52,520
Speaker 3: are contributing to China's growth in gas and LNG demand

383
00:20:52,600 --> 00:20:56,520
Speaker 3: more broadly. And again, though domestic production makes up most

384
00:20:56,560 --> 00:20:59,919
Speaker 3: of the share in China's supply stack today, that um

385
00:21:00,119 --> 00:21:06,000
Speaker 3: for growth is not as big as potential growth that

386
00:21:06,119 --> 00:21:10,080
Speaker 3: can come with LNG supply. And China's actually got more

387
00:21:10,160 --> 00:21:13,919
Speaker 3: than enough. Is building more than enough import capacity to

388
00:21:13,960 --> 00:21:16,960
Speaker 3: take in a lot of LNG well in access is

389
00:21:17,000 --> 00:21:17,879
Speaker 3: probably what it needs.

390
00:21:18,440 --> 00:21:22,240
Speaker 4: So we can see China's dependence on global LNG markets

391
00:21:22,240 --> 00:21:23,200
Speaker 4: growing in the future.

392
00:21:23,760 --> 00:21:27,800
Speaker 1: Yes, so now, as US is the largest supplier in

393
00:21:27,800 --> 00:21:30,959
Speaker 1: the world, let's change our focus then, to talk about

394
00:21:31,000 --> 00:21:33,480
Speaker 1: that country and some developments on that side. Now, I

395
00:21:33,480 --> 00:21:36,640
Speaker 1: know everybody's watching the US elections around the world trying

396
00:21:36,680 --> 00:21:38,600
Speaker 1: to know what's going to happen in November, and I

397
00:21:38,600 --> 00:21:40,679
Speaker 1: don't think anybody can predict that one. But when it

398
00:21:40,720 --> 00:21:44,159
Speaker 1: comes to gas in the US, this is an area

399
00:21:44,359 --> 00:21:47,199
Speaker 1: of growth. What does the future look like for the

400
00:21:47,320 --> 00:21:52,159
Speaker 1: US gas market irrespective of the outcome of the future elections.

401
00:21:52,359 --> 00:21:55,080
Speaker 1: Is this something that seems to be growing or has

402
00:21:55,080 --> 00:21:58,600
Speaker 1: the Inflation Reduction Act really put a damper on the

403
00:21:58,640 --> 00:22:02,240
Speaker 1: gas industry and la they did some other industries by comparison.

404
00:22:02,640 --> 00:22:06,400
Speaker 3: I'm going to tackle the LNG part versa, and then

405
00:22:07,040 --> 00:22:11,600
Speaker 3: we talk more broadly about sort of the domestic gas landscape,

406
00:22:11,640 --> 00:22:14,600
Speaker 3: and I'd love Tom's view on it as well. So

407
00:22:15,240 --> 00:22:19,600
Speaker 3: with regards to LNG exports from the US, so yes,

408
00:22:19,640 --> 00:22:23,640
Speaker 3: they're the largest now and they have been exponentially growing.

409
00:22:23,920 --> 00:22:27,280
Speaker 3: One of the things that I'm looking at, regardless of

410
00:22:27,440 --> 00:22:31,000
Speaker 3: who wins the election, is what's going to happen to

411
00:22:31,280 --> 00:22:35,639
Speaker 3: the existing queue of LNG projects that are waiting to

412
00:22:35,640 --> 00:22:40,280
Speaker 3: be developed. So these are projects under construction, these are

413
00:22:40,320 --> 00:22:44,440
Speaker 3: projects waiting for their permits, and you know they're ready

414
00:22:44,480 --> 00:22:46,280
Speaker 3: to go, and so they're ready to start building it.

415
00:22:46,280 --> 00:22:48,240
Speaker 3: They've got the customers, they got the demand for it,

416
00:22:48,280 --> 00:22:51,760
Speaker 3: So there's some legitimate business case to build these plants.

417
00:22:51,760 --> 00:22:57,960
Speaker 3: So now whether they're actually stopped from actually commissioning these projects,

418
00:22:58,040 --> 00:23:01,159
Speaker 3: I think is less likely. And I think the results

419
00:23:01,160 --> 00:23:03,760
Speaker 3: of the elections are probably not going to change that

420
00:23:04,040 --> 00:23:07,440
Speaker 3: immediate outlook. But what the results of the elections might

421
00:23:07,600 --> 00:23:11,159
Speaker 3: do is just impact the pace at which some of

422
00:23:11,200 --> 00:23:15,520
Speaker 3: these things move. For example, what I'm currently thinking about

423
00:23:15,760 --> 00:23:20,440
Speaker 3: it was called Biden Freeze basically, and basically the administration saying, hey,

424
00:23:20,520 --> 00:23:23,640
Speaker 3: we're not going to give any LNG permits anymore just yet.

425
00:23:23,720 --> 00:23:26,120
Speaker 3: Well we kind of figure some stuff out. Everybody got

426
00:23:26,160 --> 00:23:29,240
Speaker 3: really concerned about that. And I would take at least

427
00:23:29,400 --> 00:23:31,439
Speaker 3: b anyf our take is just that, you know, it's

428
00:23:31,680 --> 00:23:35,840
Speaker 3: all of that can just change after November, right or not. Right,

429
00:23:35,840 --> 00:23:38,520
Speaker 3: It could still be in place, your vanilla statements right.

430
00:23:38,400 --> 00:23:39,320
Speaker 2: At election time.

431
00:23:39,400 --> 00:23:43,160
Speaker 3: That after election those vanilla statements start getting a bit stronger,

432
00:23:43,880 --> 00:23:46,280
Speaker 3: also took a little bit more targeted, or if you're

433
00:23:46,280 --> 00:23:49,879
Speaker 3: going into election with more targeted statements, after the election,

434
00:23:50,000 --> 00:23:52,760
Speaker 3: those targeted statements start getting all downloads of it so

435
00:23:52,920 --> 00:23:56,040
Speaker 3: that the change in dynamics, I don't see that fundamentally

436
00:23:56,080 --> 00:23:56,760
Speaker 3: moving the needle.

437
00:23:56,840 --> 00:23:58,360
Speaker 2: What I do see is the timing.

438
00:23:58,920 --> 00:24:02,440
Speaker 3: I think many of these projects will indeed get developed

439
00:24:02,600 --> 00:24:05,080
Speaker 3: in the coming years. It's just that there's a whole

440
00:24:05,359 --> 00:24:09,520
Speaker 3: stack of probably filings at the DOE Office right now

441
00:24:09,640 --> 00:24:14,040
Speaker 3: just sitting there regarding LNG permits, and they just don't

442
00:24:14,119 --> 00:24:17,320
Speaker 3: want to do anything right now with that for a while,

443
00:24:17,680 --> 00:24:20,040
Speaker 3: right and you know that stack's just going to get

444
00:24:20,040 --> 00:24:23,400
Speaker 3: bigger and bigger and bigger when people start reading more

445
00:24:23,440 --> 00:24:25,159
Speaker 3: of you know, bn EX market outlooks and all the

446
00:24:25,280 --> 00:24:28,199
Speaker 3: other market looks out there which say we're going to

447
00:24:28,640 --> 00:24:31,119
Speaker 3: have the short for we're going to have a tight

448
00:24:31,840 --> 00:24:35,520
Speaker 3: LNG market situation in the next few years, and they

449
00:24:35,560 --> 00:24:37,160
Speaker 3: want to start, you know, they want to get those

450
00:24:37,160 --> 00:24:39,080
Speaker 3: projects up. They want to try to capitalize on this

451
00:24:39,480 --> 00:24:42,040
Speaker 3: on this growing market because I guess who knows what

452
00:24:42,560 --> 00:24:45,040
Speaker 3: will happen to gas in twenty fifty. But yeah, you know,

453
00:24:45,200 --> 00:24:48,120
Speaker 3: money now is better. Drill it now, people are under

454
00:24:48,119 --> 00:24:50,240
Speaker 3: ground now, you'll be about to make some money out

455
00:24:50,280 --> 00:24:52,400
Speaker 3: of it in the in the near term. So yeah,

456
00:24:52,400 --> 00:24:57,080
Speaker 3: with regards to how the US LNG landscape might change,

457
00:24:57,400 --> 00:24:58,040
Speaker 3: with the election.

458
00:24:58,440 --> 00:25:00,000
Speaker 2: I don't think it's going to fundamentally change.

459
00:25:00,040 --> 00:25:02,560
Speaker 3: I think it's either just going to delay something or

460
00:25:02,600 --> 00:25:06,159
Speaker 3: expedite something that is probably going to happen still at

461
00:25:06,240 --> 00:25:09,680
Speaker 3: least in there in the next five years. So again

462
00:25:09,720 --> 00:25:11,879
Speaker 3: there's that whole long stack of permits waiting in the

463
00:25:11,960 --> 00:25:12,360
Speaker 3: doo week.

464
00:25:12,480 --> 00:25:13,680
Speaker 2: If all of this comes.

465
00:25:13,720 --> 00:25:17,159
Speaker 3: To fruition, we're going to have way too much energy

466
00:25:17,359 --> 00:25:20,600
Speaker 3: than the world needs. Quite frankly, we actually already might

467
00:25:21,040 --> 00:25:23,320
Speaker 3: have too much LNG in a couple of years time.

468
00:25:23,480 --> 00:25:27,959
Speaker 3: There's a whole bunch of lergy projects currently under construction.

469
00:25:28,280 --> 00:25:30,640
Speaker 3: It's just that they've been a bit delayed. So we're

470
00:25:30,640 --> 00:25:34,960
Speaker 3: talking projects in Mozambique. We've got some projects we didn't

471
00:25:34,960 --> 00:25:38,240
Speaker 3: start up in Canada. We've got this sanctioned Russian LNG

472
00:25:38,440 --> 00:25:40,760
Speaker 3: plant that we were talking about. Actually, when all of

473
00:25:40,760 --> 00:25:44,119
Speaker 3: these come into the market, be any of it's actually

474
00:25:44,160 --> 00:25:47,280
Speaker 3: projecting a glutz in the market. Now, this might spur

475
00:25:47,640 --> 00:25:50,239
Speaker 3: demand and it might actually change the dynamics of how

476
00:25:50,359 --> 00:25:54,399
Speaker 3: buyers and people perceive their use of natural gas. But

477
00:25:54,480 --> 00:25:57,119
Speaker 3: we're talking that at some point in time you're going

478
00:25:57,200 --> 00:25:59,520
Speaker 3: to have a full bunch of LERG in the market

479
00:25:59,680 --> 00:26:02,160
Speaker 3: and gas price is all going to get cheap again,

480
00:26:02,320 --> 00:26:04,879
Speaker 3: And I think the question that I think about a

481
00:26:04,920 --> 00:26:08,760
Speaker 3: lot is is that going to actually bring back demand.

482
00:26:08,880 --> 00:26:13,840
Speaker 2: When something's cheap, you kind of don't mind.

483
00:26:13,800 --> 00:26:16,639
Speaker 3: Using it, especially when it's an energy source that is

484
00:26:16,720 --> 00:26:21,480
Speaker 3: readily available and easy easy to put into your system.

485
00:26:21,640 --> 00:26:24,000
Speaker 1: Barring international policy on climate.

486
00:26:23,840 --> 00:26:27,080
Speaker 3: Barring international policy on climate exactly.

487
00:26:26,920 --> 00:26:29,919
Speaker 1: And then positioning it against the Inflation Reduction Act. Is

488
00:26:29,920 --> 00:26:32,159
Speaker 1: that potentially a naive question because I think when we

489
00:26:32,200 --> 00:26:34,400
Speaker 1: talk about the US and so much of the work

490
00:26:34,400 --> 00:26:36,560
Speaker 1: that we do, it's been a game changer for the

491
00:26:36,640 --> 00:26:38,560
Speaker 1: US in terms of some of the other markets that

492
00:26:39,000 --> 00:26:43,720
Speaker 1: you maybe existing alongside energy, such as hydrogen. So has

493
00:26:43,720 --> 00:26:45,680
Speaker 1: it had an impact on energy or do you see

494
00:26:45,720 --> 00:26:47,040
Speaker 1: it having an impact on energy?

495
00:26:48,080 --> 00:26:48,399
Speaker 2: Now?

496
00:26:48,600 --> 00:26:53,000
Speaker 3: It's a completely unrelated If I'm speaking to an US

497
00:26:53,200 --> 00:26:55,520
Speaker 3: LNG producer or somebody in the US L and D

498
00:26:55,640 --> 00:26:57,560
Speaker 3: value chain, if they have not asked me about the

499
00:26:57,560 --> 00:27:01,840
Speaker 3: inflation reduction that it shows that they're not concerned about it, right,

500
00:27:02,280 --> 00:27:04,399
Speaker 3: I Mean, that's kind of my gauge. No one's asked

501
00:27:04,480 --> 00:27:10,800
Speaker 3: me about it from the immediate LNG industry because fundamentally

502
00:27:11,359 --> 00:27:14,679
Speaker 3: they're still signing customers, right, be that in Asia, be

503
00:27:14,800 --> 00:27:18,159
Speaker 3: that in Europe, be that in Emerging Asia, Middle East

504
00:27:18,680 --> 00:27:22,840
Speaker 3: and elsewhere. They're still finding customers if banks are still

505
00:27:22,960 --> 00:27:25,600
Speaker 3: you know, depending on sort of credit word ess of

506
00:27:25,680 --> 00:27:28,280
Speaker 3: the developer, the customers and everything else about the project,

507
00:27:28,400 --> 00:27:31,760
Speaker 3: banks are still willing to finance it. And they're still

508
00:27:31,800 --> 00:27:33,840
Speaker 3: you know, they still have the contractors, they still have

509
00:27:33,920 --> 00:27:36,919
Speaker 3: the backing, they still have shareholders who are willing to

510
00:27:37,359 --> 00:27:43,040
Speaker 3: back the project. There's nothing stopping them aside from ambiguity

511
00:27:43,359 --> 00:27:46,399
Speaker 3: and uncertainty in the political landscape about what might just

512
00:27:46,400 --> 00:27:48,840
Speaker 3: happen with their permitting. So this is where it's a

513
00:27:49,280 --> 00:27:53,520
Speaker 3: way and see what happens that big stack of documents

514
00:27:53,560 --> 00:27:54,000
Speaker 3: waiting in the.

515
00:27:54,000 --> 00:27:56,960
Speaker 4: D Can I add my two cents here because one

516
00:27:56,960 --> 00:27:59,640
Speaker 4: of the hats I wear is I sort of tie

517
00:27:59,680 --> 00:28:01,600
Speaker 4: to get a lot of the analysis we do on

518
00:28:01,840 --> 00:28:04,399
Speaker 4: the US and in particular things like the Inflation Reduction

519
00:28:04,440 --> 00:28:07,080
Speaker 4: Act when it comes to LNG. I think that the

520
00:28:07,240 --> 00:28:11,119
Speaker 4: US is very relevant in how it can affect the

521
00:28:11,119 --> 00:28:15,720
Speaker 4: global market and how what the administration decides to do

522
00:28:15,920 --> 00:28:18,760
Speaker 4: or encourage in terms of export capacity that can have

523
00:28:18,760 --> 00:28:21,760
Speaker 4: an effect on the global market. But what happens domestically

524
00:28:21,760 --> 00:28:25,680
Speaker 4: in the US is relatively unaffected by LNG because there's

525
00:28:25,480 --> 00:28:29,720
Speaker 4: this constraining factor, which is the capacity to export LNG.

526
00:28:30,080 --> 00:28:32,600
Speaker 4: So it's almost like the US can affect the global

527
00:28:32,720 --> 00:28:37,200
Speaker 4: LNG market, but the global LNG market does not affect

528
00:28:37,200 --> 00:28:39,960
Speaker 4: what happens in the domestically in the US that much.

529
00:28:40,000 --> 00:28:42,520
Speaker 4: It's somewhat insulated from it. And a lot of what's

530
00:28:42,520 --> 00:28:45,240
Speaker 4: happening in the Inflation Reduction Act is a domestic US

531
00:28:45,400 --> 00:28:49,640
Speaker 4: energy transition and developing US supply chains for clean technology,

532
00:28:49,720 --> 00:28:53,440
Speaker 4: which will affect maybe the domestic gas market in the US,

533
00:28:53,800 --> 00:28:57,840
Speaker 4: but it won't actually translate into affecting the global LNG market,

534
00:28:57,880 --> 00:29:00,400
Speaker 4: and the global LNG market doesn't impact that. So is

535
00:29:00,400 --> 00:29:03,280
Speaker 4: this like paradox. The US is incredibly important for leg

536
00:29:03,720 --> 00:29:05,400
Speaker 4: and there are some people who make a lot of

537
00:29:05,440 --> 00:29:07,720
Speaker 4: money from LG in the US, the people who own

538
00:29:07,760 --> 00:29:10,160
Speaker 4: the export terminals, but apart from that, energy does not

539
00:29:10,480 --> 00:29:13,960
Speaker 4: impact the US in such a meaningful way. I don't know, Foles,

540
00:29:13,960 --> 00:29:15,400
Speaker 4: would you agree with that take?

541
00:29:15,600 --> 00:29:16,680
Speaker 2: I would agree.

542
00:29:16,720 --> 00:29:19,240
Speaker 3: I mean, the only way it really does impact is

543
00:29:19,320 --> 00:29:22,280
Speaker 3: just that if you start exporting a whole bunch more gas,

544
00:29:22,640 --> 00:29:24,520
Speaker 3: sure you're going to have a knock on impact on

545
00:29:24,680 --> 00:29:27,160
Speaker 3: prices domestically, right, right.

546
00:29:27,160 --> 00:29:31,320
Speaker 4: So if export capacity increases much more than it it

547
00:29:31,360 --> 00:29:34,480
Speaker 4: currently is at, then that coupling will become a lot

548
00:29:34,520 --> 00:29:36,600
Speaker 4: more real. But it's somewhat limited at the moment.

549
00:29:36,840 --> 00:29:39,160
Speaker 3: It is somewhat limited at the moment. And Tom, you know,

550
00:29:39,280 --> 00:29:42,000
Speaker 3: so I completely agree with what you said. So the

551
00:29:42,000 --> 00:29:47,000
Speaker 3: inflation reduction that was supposed to help the domestic ecosystem,

552
00:29:47,160 --> 00:29:51,480
Speaker 3: the BLNG story, that is a that is an export business,

553
00:29:51,800 --> 00:29:54,520
Speaker 3: right that that is a and you know, when you

554
00:29:54,560 --> 00:29:57,440
Speaker 3: think about it, especially from the US perspective, it is

555
00:29:57,520 --> 00:30:01,200
Speaker 3: something that from a from a sale and commodity perspective,

556
00:30:01,240 --> 00:30:05,360
Speaker 3: the US has an incredibly strong position in perhaps a

557
00:30:05,400 --> 00:30:08,080
Speaker 3: position that they've you know, not had in a number

558
00:30:08,160 --> 00:30:11,640
Speaker 3: of other exposiblitys. As the US has very much become

559
00:30:11,640 --> 00:30:15,240
Speaker 3: a consumer of global goods, and this is one of

560
00:30:15,240 --> 00:30:18,080
Speaker 3: those things that they are just a really big exporter

561
00:30:18,360 --> 00:30:19,800
Speaker 3: a commonly used good.

562
00:30:20,240 --> 00:30:23,040
Speaker 1: So, as we started the show challenging the premise of

563
00:30:23,080 --> 00:30:25,280
Speaker 1: whether or not there could be a truly global gas

564
00:30:25,280 --> 00:30:28,560
Speaker 1: outlook and establishing of course that there can, I want

565
00:30:28,600 --> 00:30:33,000
Speaker 1: to finish by actually talking a bit about how natural

566
00:30:33,040 --> 00:30:37,719
Speaker 1: gas is perceived globally. So rewind five plus years. There

567
00:30:37,800 --> 00:30:39,680
Speaker 1: was certainly a point in time where we we're talking

568
00:30:39,680 --> 00:30:42,719
Speaker 1: about it as a bridge fuel or is you know,

569
00:30:42,760 --> 00:30:46,120
Speaker 1: this discussion of something that would inevitably be transitioned out

570
00:30:46,200 --> 00:30:49,440
Speaker 1: of the energy economy. And you know, my perception is

571
00:30:49,480 --> 00:30:52,880
Speaker 1: that that has in some respects really changed more recently

572
00:30:52,920 --> 00:30:56,000
Speaker 1: and that it has this very firm place in our

573
00:30:56,040 --> 00:30:59,200
Speaker 1: discussions around what the global energy mix looks like. That's

574
00:30:59,280 --> 00:31:02,080
Speaker 1: really evident when we actually look at what happened at

575
00:31:02,080 --> 00:31:05,240
Speaker 1: COP twenty eight in Dubai and how the discussion in

576
00:31:05,280 --> 00:31:08,960
Speaker 1: that stage where it was very much focused on decarbonization

577
00:31:09,280 --> 00:31:12,240
Speaker 1: and tackling the climate change issue, that it was referred

578
00:31:12,280 --> 00:31:14,560
Speaker 1: to as a transitional fuel that could play a role

579
00:31:14,600 --> 00:31:18,360
Speaker 1: in facilitating the energy transition while ensuring energy security.

580
00:31:18,440 --> 00:31:20,400
Speaker 2: Those were the terms that were used.

581
00:31:20,560 --> 00:31:23,800
Speaker 1: So how would you say, very much in a more

582
00:31:23,800 --> 00:31:26,640
Speaker 1: anecdotal sense, but how would you say that natural gas

583
00:31:26,720 --> 00:31:30,880
Speaker 1: and energy are perceived globally right now and the role

584
00:31:30,920 --> 00:31:32,600
Speaker 1: that it plays in decarbonization.

585
00:31:33,240 --> 00:31:35,760
Speaker 3: I've spent many years in the oil and gas community,

586
00:31:36,280 --> 00:31:40,080
Speaker 3: but I never say, yeah, gases in net zero fuel.

587
00:31:40,520 --> 00:31:41,480
Speaker 2: It don't.

588
00:31:41,840 --> 00:31:46,240
Speaker 3: It's not just is not, but yes, it is a

589
00:31:46,600 --> 00:31:52,680
Speaker 3: lower carbon fuel that can support the energy transition.

590
00:31:53,000 --> 00:31:56,120
Speaker 2: And I think what's happened with gas over the years.

591
00:31:56,320 --> 00:32:00,600
Speaker 3: It's oil used to dominate, still dominates to and extent.

592
00:32:01,240 --> 00:32:04,520
Speaker 3: Gas was sort of waiting in the wings, waiting for

593
00:32:04,680 --> 00:32:09,680
Speaker 3: its time to shine and be the fuel of the future,

594
00:32:10,320 --> 00:32:12,640
Speaker 3: the dawn of gas, Global age of gas.

595
00:32:12,720 --> 00:32:14,480
Speaker 2: You know, these are things we used to say years ago.

596
00:32:14,840 --> 00:32:18,600
Speaker 3: And when the energy transition started to accelerate, I think

597
00:32:18,640 --> 00:32:22,840
Speaker 3: that you very much changed and you had a gas

598
00:32:22,880 --> 00:32:24,200
Speaker 3: industry that was like way.

599
00:32:23,800 --> 00:32:25,520
Speaker 2: Where were ware we were supposed to have our time,

600
00:32:25,600 --> 00:32:26,160
Speaker 2: what's going on?

601
00:32:27,040 --> 00:32:31,360
Speaker 3: And then you know, you started seeing investments drop and

602
00:32:31,400 --> 00:32:33,920
Speaker 3: you started to see a little bit being you know,

603
00:32:34,000 --> 00:32:37,520
Speaker 3: you started to see that villainization of fossil fuels, oil

604
00:32:37,600 --> 00:32:41,240
Speaker 3: and gas. We saw that, you know, gas was being weaponized,

605
00:32:41,440 --> 00:32:44,440
Speaker 3: and people get scared of that. So when people get

606
00:32:44,760 --> 00:32:47,800
Speaker 3: scared that their lives depend so much on something, you

607
00:32:48,320 --> 00:32:50,680
Speaker 3: start to change your mindset and you start to adjust

608
00:32:50,920 --> 00:32:54,520
Speaker 3: your life to actually manage this particular risk. So what

609
00:32:54,560 --> 00:32:58,480
Speaker 3: we saw in Europe, for example, from a business perspective,

610
00:32:58,480 --> 00:33:00,520
Speaker 3: we saw a lot of the industry saying, yeah, no,

611
00:33:00,640 --> 00:33:04,320
Speaker 3: I like this is not cool. Yeah, we're changing, we

612
00:33:04,360 --> 00:33:07,760
Speaker 3: are diversifying away from gas like this is too volatile.

613
00:33:07,920 --> 00:33:11,440
Speaker 3: We saw people actually turn down their thermicids during winter

614
00:33:12,000 --> 00:33:15,720
Speaker 3: just to consume less gas as a demand change.

615
00:33:15,800 --> 00:33:18,760
Speaker 2: That happened. But what happens.

616
00:33:18,440 --> 00:33:22,880
Speaker 3: When gas is abundant and gas becomes dirt cheap? Are

617
00:33:22,880 --> 00:33:25,640
Speaker 3: the industries going to turn back on There are businesses

618
00:33:25,680 --> 00:33:26,080
Speaker 3: at the end.

619
00:33:26,000 --> 00:33:27,840
Speaker 2: Of the day, if they're.

620
00:33:27,640 --> 00:33:30,200
Speaker 3: Alternative there's currently more expensive than natural gas.

621
00:33:30,240 --> 00:33:31,400
Speaker 2: Are they going to switch back? Cook?

622
00:33:31,600 --> 00:33:31,840
Speaker 3: For me?

623
00:33:32,080 --> 00:33:33,480
Speaker 2: I think it's a question mark.

624
00:33:33,640 --> 00:33:37,800
Speaker 3: I think gas will still have a very prominent role

625
00:33:38,080 --> 00:33:42,840
Speaker 3: in the energy system unless there is a lot longer

626
00:33:43,200 --> 00:33:46,840
Speaker 3: policy against the use of it, and right now I

627
00:33:46,920 --> 00:33:51,840
Speaker 3: think that's probably unlikely to happen given that it impacts

628
00:33:51,840 --> 00:33:54,560
Speaker 3: so many things. It also impacts the ability for a

629
00:33:54,600 --> 00:33:57,520
Speaker 3: lot of countries in the global cell to actually grow

630
00:33:57,560 --> 00:34:02,480
Speaker 3: their economies. They're having increases empowered you know, they need

631
00:34:02,720 --> 00:34:06,960
Speaker 3: power sources and gas has been the easiest thing for them.

632
00:34:07,440 --> 00:34:12,640
Speaker 3: You have economies that have built the industries and economies

633
00:34:12,680 --> 00:34:16,360
Speaker 3: on domestic gas and they still need it to grow

634
00:34:16,440 --> 00:34:17,400
Speaker 3: and to function.

635
00:34:18,239 --> 00:34:22,920
Speaker 1: Very simply put, this is a global market with regional

636
00:34:22,960 --> 00:34:25,040
Speaker 1: markets that have an impact on the rest of the

637
00:34:25,040 --> 00:34:29,799
Speaker 1: world and policy whether it is well Essentially, it's international

638
00:34:29,800 --> 00:34:33,759
Speaker 1: policy that plays into the energy transition that is so

639
00:34:33,840 --> 00:34:36,920
Speaker 1: critically important. So when we think about the economics of

640
00:34:36,960 --> 00:34:41,200
Speaker 1: our energy system, we're definitely also thinking about policy and

641
00:34:41,239 --> 00:34:43,799
Speaker 1: politics around the world. And thank you for shedding light

642
00:34:43,920 --> 00:34:47,279
Speaker 1: on that and some of just some of the many

643
00:34:47,320 --> 00:34:50,920
Speaker 1: things that are happening in gas markets around the world

644
00:34:50,960 --> 00:34:52,839
Speaker 1: on today's show. Thank you Faus for joining us.

645
00:34:53,120 --> 00:34:54,879
Speaker 2: Thanks Dana, it was pleasure to be here.

646
00:34:55,320 --> 00:35:03,799
Speaker 4: Thanks everyone.

647
00:35:05,000 --> 00:35:08,120
Speaker 1: Today's episode of Switched On was produced by Cam Gray

648
00:35:08,320 --> 00:35:12,000
Speaker 1: with production assistance from Kamala Shelling. Bloomberg NEIF is a

649
00:35:12,040 --> 00:35:15,160
Speaker 1: service provided by Bloomberg Finance LP and its affiliates. This

650
00:35:15,280 --> 00:35:17,960
Speaker 1: recording does not constitute, nor should it be construed as

651
00:35:18,000 --> 00:35:21,880
Speaker 1: investment advice, investment recommendations, or a recommendation as to an

652
00:35:21,920 --> 00:35:24,640
Speaker 1: investment or other strategy. Bloomberg A NEIF should not be

653
00:35:24,680 --> 00:35:28,480
Speaker 1: considered as information sufficient upon which to base an investment decision.

654
00:35:28,560 --> 00:35:31,560
Speaker 1: Neither Bloomberg Finance LP nor any of its affiliates makes

655
00:35:31,560 --> 00:35:35,319
Speaker 1: any representation or warranty as to the accuracy or completeness

656
00:35:35,320 --> 00:35:38,320
Speaker 1: of the information contained in this recording, and any liability

657
00:35:38,360 --> 00:35:41,040
Speaker 1: as a result of this recording is expressly disclaimed,