 I'm sure that we'll have people still straggling in with the rain delays and everything. I know it was a difficult time for many people on their commute. I'm David Pumphrey, I'm a senior advisor in the energy and national security program here at CSIS, and it's really a great honor to be able to moderate this discussion with Dr. Faridun Feshiraki. Faridun and I have known each other for many years. Would you say Faridun? Is that a good estimate? So we probably don't want to say many, many years. And I feel like I have really learned so much about energy markets from Faridun, his knowledge, and watching his practice and his work grow over time to the point where he really has a global reach. He started focusing in Asia markets was a leading expert on Asia markets when nobody really seemed to care too much what was happening in China and other places and has now moved his vision to really encompass the whole world. And I think that's appropriate for the discussion that we're having because he can really bring to this discussion that perspective. I think he's probably been how many times around the world in the last year, several times, I think, talking to leaders in energy markets about their perceptions of what's changing, what's happening, where things are headed. And that's why we thought, and we have Faridun maybe once a year, and it's always a question of what to select for the topic for him to talk about because there's so many opportunities. So he's common, he's presented discussions on India and China to a packed house like this. Global energy oil markets, global gas markets, Iran and Iran sanctions. So there's so many different things we could choose but we thought given the focus that's now in this town on the question of what does it mean to see the US situation changing so rapidly in terms of our gas production and our oil production that to have him come in on that. So this is a little different presentation than he might usually give, which would be very heavy laden with statistics and numbers and projections. This one I think is more his observations of what's happening and the implications of those things. It also ties in nicely with the work that has been finished, the project that Sarah Ladislaw had led on our geopolitics of the energy revolution that we just published recently, the new energy and new geopolitics. And I think it will be interesting to see the extent to which Faridun who hasn't actually had a chance to review our copy agrees with us in terms of the conclusions in that study. It's also I think a special moment for me because this is likely my last opportunity to host a session here at CSIS and I can't think of a better session to have be my last one than one with Faridun. So Faridun, if you'd like to take the floor. Thank you very much, Dave. I'm very happy to be here again and honestly the reason that I picked this time is because I know he's retiring next week. And I wasn't sure whether Frank is gonna let me into the building after he's gone. So sort of, I thought this is an opportunity to come here and see Dave in the last week in being at CSIS. He has been retiring a few times so we don't know whether there will be additional retirement parties. But I don't think he can separate himself totally from this business. So from wherever he's sitting, he'll be his hands and arms and legs will be all over the place. As Dave says, the presentation today is about what is the meaning of the US as an energy superpower for the rest of the world. For us as consultants, this is the best thing since sliced bread, unbelievable. Not only it's happening in the US but everything that the US can produce and export has to go to Asia. That's wonderful. None of it is gonna go to Europe, a little bit maybe to Latin America. Almost nothing to Africa. A little bit maybe to the Middle East but mainly it's gonna go to Europe, to Asia. So it is fortunate that we are the big fish in that pond and so a lot of new business, a lot of new concerns about what is possible and what is not possible. So I wanna start first by defining what I mean by superpower. I don't have a screen in front of me. Or that one, okay. So some of these things are obvious. Some of them are not obvious to many people and I must say that I am associated here with CSIS as a sort of think tank but I am very, very of the too much geopolitics in the Washington area because a lot of people talk about these issues and don't understand what happens actually in the oil and gas markets. Lot of conclusions are faulty and I think all of us remember that as soon as the crime crisis began and everybody calling it so, why don't we just set some cheap gas to sort of Ukrainians and be done with it? I mean, simply people just don't understand how these markets work and some of those folks coming like it was the Lithuanian Prime Minister begging President Obama give me some gas as if he has gas and he can give it and as if it can be turned on and off. I mean, this is all sort of so much misunderstanding about how the markets work. So let me define you from point of view of us what is makes the US superpower. One is that there's an opaque size increase in production between light crooks and we have to distinguish, I'll distinguish between light crooks and condensates. Total additional production by next year would be probably equal to total quaty oil production. So this is a substantial addition which has come to the United States. US becoming the largest, is already a largest use of condensates in the world. Many of you may not know what condensate is or not care, but it is very important. Condensate, the liquids which are extracted from gas. Some natural condensates are produced but the value of condensate is that it is very, very light and it produces a lot of NAFTA as a feedstock for petrochemicals. Particularly advanced petrochemicals. So number one in the world has been guitar, 800,000 or 7,800,000 baros per day here and number two would have been Iran and then number three and four, I think are in two producers in Australia. That's a couple of 100,000 baros per day. So what's happening to US, the volumes that US puts together is probably going to be more than all of them combined. And I will tell you the significance of this is very great because we hope that Adam Sminsky is gonna differentiate between crude and condensate. And people say, well, it's the same thing, it's not the same thing. Nobody cares about condensate in the United States. Nobody wants it. But the rest of the world wants it, Asians desperate for it. And pay a huge premium, $25, $30 a barrel more than what the US producers are receiving today. So I'll come back to the condensate issue when I get to Asia, but it's a very significant issue. Then among the top three LNG producers by 2022, may become number one. We don't know, they are suicide bombers in the US LNG industry. People who want to produce the gas, but they have no idea where it goes. Actually sort of, so all the money that you remember people lost on the regas, they're gonna lose it now on LNG business, but except multiplied by 10. Since the regas terminal cost you a billion, a liquefaction cost you 10 billion. So there is a lot of misreading. I'm continuously amused by people who believe that there is a non-ending demand. Already in Asia, it's difficult to sell LNG. All the people who have bought US LNG have not been able to resell it. We are numbers show that 35, 38% of the firms says and purchase contracts signed by the US, the buyers, many of them are middlemen. If there's international companies, trading houses, they don't use it themselves. They have to go resell it. So I got two sales in the business. Between 35, 38% of it as of today is still unsold. So if they haven't been able to sell it, then how come a new player suddenly emerges who has never even traveled outside the US and be able to find those markets? So a lot of misunderstanding, but US will be the top three and may become number one. We don't know. This is happening by 2022. Top LPG exporter in the world by end of next year. This is real. This is today. That for decades, Saudis were the largest LPG exporter in the world. Four, five years ago, the guitarists became number one after the big LNG projects. Now Abu Dhabi is number two. Saudis are number three and Iranians are number four. LPG exporters. By the end of next year, the US will become number one. This is significant. Very significant because LPG business doesn't require a permit from anybody. There's no fine products based on the classification. Exports are permitted. You don't have to spend $10 billion to build a liquefaction plant. You have to build the terminal to be able to get it out of the country. And we are just the first wave of beginning of the curve. It's remarkable. The price of the US LPG based on Mount Bellevue, hitting the Asian market is 30% today less than the Saudi price. So already the prices are crashing. It is not possible to have two prices at destination. These prices have to converge. And the way it will converge is that the Saudi price have to come down to match the US price. This the future of it is already set in motion. But it's so new and it's so amazing that suddenly from almost zero US becomes so big. Now the rage these days in Asia, particularly in China, is PDH plants. PDH plants are people who use propane to produce propane. And I've hear so much about PDH, I've decided to exchange my PhD for PDH because it seems to be much more profitable these days. These PDH plants are now many of them are based on what can be gotten from the US. So there is a whole huge new flow from US to China of LPG, which hasn't even started. Very dramatic. Then of course the US became last year the largest exporter of refined products this year. Still either number one or number two, Adam can tell. But the US refiners are having such a great time. It is remarkable. Everybody in the world is suffering. People with the best refineries in the world, Korea, India, they are barely making their costs. And these folks in the US are enjoying it because of the crude discount. Now yes, they are also smart guys. They run the refineries well. And the independents in the US are pretty sort of savvy producers. But it is the crude advantage, which makes a difference. And we have to anticipate how long is the crude advantage. We'll continue. That depends on whether we can export crude or we cannot. But it can disappear very quickly and the fortune can disappear and become a major challenge. Also the performance of the Latin American countries in building refineries is a boost. You can export gasoline to Latin America and diesel to Europe and still escape all the problems that the other people have in the refining business. But this is what makes US the largest exporter of refined products today in the world. And it is something which can continue for a while longer, although the demand in the US is either flat or slightly declining. Now the US will also emerge as a major chemical exporter by 2020. This is ethane-based petrochemicals. This is not based on after cracking, based on ethane. And that becomes a very, very big number. Many people are coming, basic ethylene petrochemicals to be done in the US, but the sophisticated petrochemicals still require NAFTA as feedstock. And of course, US is a major coal exporter. It has always been. And the chances of coal is back in fashion, by the way, but we have a golden age of coal coming back. And we have everybody, including the Japanese, but also all over the world turning back to coal. Coal, you can clean it up. If you don't have to worry too much about the carbon, certainly in terms of pollutants, you can make it as good as anything else. So the US still has a bigger role to play on coal, but I'm not focusing on that. I'm gonna focus on the oil and gas issues. Let me go back to the condensate story. In the US, the refiners, they will fight tooth and nail against exports of crude. They will fight harder than the chemical producers fight for against exports of natural gas. That battle on natural gas export is already lost. Exports will happen. And of course, a lot of permits are being given, but permits being given doesn't mean the project will get done. Because in the US, you have DOE, non-FTA permit, you have a FERC permit, but you have a major permit has to be given by Adam Smith. The economic doesn't work, you can export it. Many of these guys will not get Adam Smith permit because once they get the permits, they think it's a slam dunk. It's not a slam dunk. Still, you have to find the customers. And as I said, the boys, which have already bought and signed firm contracts cannot sell their volume. So why would I believe that somebody else would go and sell their volume? I have to keep that in mind. But the condensate story is a very different story. The refiners will fight, not to allow it to be exported. Because this is their future. Without that, there is gonna be a very, very tough environment. So what is crude? What is condensate? In my definition, what works? And this is, please, I don't take notes. 48 degree and above, make it condensate. Nobody cares. 48 degree, 45 to 48 degree, probably a third of the industry cares. Below 45 degree, they all care. Nobody wants anything to go out. So since actually the US crude is not very important crude, the tight oil, nobody wants it. There's plenty of crude like that available in the market. Plenty. Nigerians who have been pushed out of the US market, they are selling the crude and they can't get the market. So it is not that this crude is now, people are dying to get it. But people are dying to get condensate. Now you can export the condensate in two different ways. You can export it directly as condensate or you can split it in the United States itself and create, it gives you 70% NAFTA as a petrochemical feed and 30% of other fuels, including diesel, kerosene. Four months ago, zero plans in the US for condensate splitter. Today, four or five projects are firm. And five are in discussion. Of course, everybody wants to export NAFTA to Asia so they have to talk to me or they wanna export the condensate to Asia, they have to talk to me again. So this issue is very, very high priority for us because in Asia, you have many people, at least five condensate splitters are under construction with no condensate attached to them. And condensate is not like crude, they can just go and buy it from somebody else. You have the guitaries, 700,000,000 bar per day, 400,000 bar per day from Iran and 2,300,000 bar per day from Australia. That's it. There are no big volumes of condensate available anywhere else. And then you're looking at one to two million bar per day from the US, depending again on how we put the definition. So those guys who are building the splitters are becoming desperate in getting access to condensate. What do they pay for the condensate? The prices that the guitaries charge today are Dubai plus two. So actually it gets to buy crude price. The Iranian prices are similar. Maybe a couple of dollars less because they don't have the marketing network as such but it is almost crude price. So the people who would sell it outside will get WTI Brent differential plus what the discount on the condensate in the US is which is right now running about 12 to $15 a barrel to WTI. So it's about $25 extra money. It's a huge, huge boost for the US producers. Now if you can't export it, then you have to split it in the US. And if you have to split the US, it costs a couple of hundred million dollars with one fifty to two hundred million dollars each. But most of the people who have the condensate have never even traveled outside the US. They don't know where to go. In fact, one would have anticipated that the best thing is to go and find the Asians who want to bring them to US and make investments. Investment in the US is great because you invest, you actually own the stuff and you get a free green card too on top of it. So a lot of people can be persuaded to come but you have to know who to go to and they don't know. So that aspect has not happened yet. And so much of these guys are now, they're building in anticipation that they cannot export but if the exports take place then there may be no need for these sprinters because certainly those who are building the sprinters outside would much prefer to get it and exporting condensate which is a very light crude could be done in the usual. Same style, ships, no big deal. But once you're making the refined product then you have to export each of them in smaller ships and segregated tanks. So it'd be a very different story. So the definition of the US as super power in our view are these numbers that I have put in front of you. Now there is an issue to be discussed about the longevity of this. And I think this is what Dave mentioned in terms of the study the CSIS has done that I have yet to read. But longevity of some of these projects are in question. There would be a level certainly on the liquid side. Now is the peak 2018, 2022, 25, we don't know. Honestly, nobody knows. It's not that people are hiding it because it's just so new. People don't know. Recently some of the Marcellus drilling yields incredible results. People are finding so much more shale and the liquids from Marcellus that nobody expected. People continue to innovate, coming up with new technologies. And things may surprise us, but at the moment prudent assumption is that to see that under liquids there is a limit. On the gas side, I think plenty of gas would be made available, but of course Henry Hopp prices would have to go up. We don't know how far. We think at least six, but it could be seven or eight by middle of next decade. Who knows? I am much more confident about my crude oil forecast than about my Henry Hopp forecast because crude oil market has bosses. The world cannot afford too high. The world cannot afford too low. But Henry Hopp, it's really a free market and free market is very hard to forecast. So we don't know what's gonna happen. However, I think that the continuation of exports of LNG at the extents that we're looking at, I think is sustainable for a long time. LPG is sustainable also. So only, I would say my question mark would be on the liquids, where the liquids can be maintained at that level or not. And again, chemical part, the ethane-based petrochemicals also can continue as is. So this is my definition. Now impact on Europe, actually more coal exports to Europe. And while I expect that a little bit of LNG will go to Europe on an opportunistic basis, if today you take the European prices of $7.50 bit under $8 for the hub prices in the UK and you want to get a US producer to export LNG to US, to Europe, they will be losing money. So when people say, well, let's produce it and sell it to Europe, no. People say, well, actually let's leave the sanctions from Iran so Iranians take natural gas to Europe. That's also nonsense because the price in Europe is too low. Until the prices in Europe justified, the Iranians are not buying gas at $9, $10 a million with you from Turkmenistan. They build a pipeline without sanctions and all the way bring it to Europe to sell it for $7.50? Makes no sense to anybody. So the problem in Europe is not dependence on the Russians. The problem is that their prices are too low. Weak, declining economies. That's not supporting the LNG projects or pipeline projects. I think if the Russians hadn't built the pipeline, they wouldn't build it today, but the money is sunk. The money is gone. So when the money is gone for them, this is still the natural market and all the speculation that I read, I find it comical, Europe has to buy from Russia. That's it. There's nothing we can do about it until 2030. For now, we have to continue. And I need to say that sort of, I don't think what the Russians are asking from Ukraine is unreasonable. They have a rack price. The rack price is $13.40. They ask everybody the same price. That's the Chinese the same price. It's Germans the same price. And then they will discount it to you based on your alternative. Ukraine's alternative is about $16 gas. There's no alternative. So if you're nice to me, then I can give you a discount. If you're my enemy, why should I give you a discount? I wouldn't give a discount. And part of the discount was related to the use of the port facilities in Crimea, which by the way is mine now. I don't have to pay you anything. So why would I end up giving you a discount? So I think eventually they will come down and give a lower price. But I don't think we need to vilify them as this is the gouging the Ukrainians. They charge you no. If today we take any LNG from say, guitar to Poland or to Slovakia and send it to Ukraine, it'll cost them $3 more a billion with you than the Russians are asking for. The rack price. The contract that Poland has with guitar is about $14.50 million between you at $100 oil. So these are not the kinds of things that really sort of realistic. Realistically, US gas has very limited application to Europe. One thing that the US is important for Europe is exporting diesel. And as long as the crude advantages in the US, Europe will be receiving diesel. And by the way, the Russians are pouring diesel into Europe, overwhelming the American exports because they're next door. And they want to be in the European market. And all the companies are either directly state-owned or quote unquote indirectly owned by the powers to be in Russia. So this diesel importance in Europe will also gradually disappear. But it is there today. Impact on Russia, there is no real big impact on Russia, except that the LNG projects which the Russians are planning get impacted by the US LNG projects. One of the things that have not been announced yet, so it will come out in the next few weeks, the Japanese government has decided that they don't like the Russians anymore. And all of the LNG projects that they have promoted for 10 to 15 years, they don't want to promote it anymore. That's the Vladivostok LNG project. This is the Sakhalin-1 ExxonMobil Rosneft and Sodeco project and the train three of Sakhalin-2. They have been working so hard to promote them. Now, suddenly, the political boss says, Americans tell us Russia is bad, so we don't want to buy it anymore. So they ask them, so what is your mission now? Mission is Alaska. That's the mission. So the Japanese companies will be lined up and will receive JBIK funding and will begin to look Alaska. We can all speculate whether the Alaska and economics how it is. I have my views, but there will be definitely a big push by the Japanese government into that. This is one of the casualties of the Ukrainian crisis, which actually means a lot to Russia. But the big competition is on the LNG side. And of course, so the US is a competitor for supply of refined products to Europe, but I think it's a losing battle with the Russians. They are sitting there. They have their own crew in the next door, and they will continue to come in in a big way. Now, what is the impact on the Middle East? Of course, so many of these geopolitical geniuses in Washington, they all talked about, as soon as the US production of oil goes up, exports from the Middle East will go down. Well, I have news for you. Exports from the Middle East are going up, not down. And it is related to a number of factors. When the Israeli recruits are heavily pushed into Asia, there are term contracts of almost $500,000 per day for Venezuelan recruits in India, between reliance and SR. That is, there are $300,000 per day going to China today, but the new refinery jointly with PDV is being built for $400,000 per day of 17-degree crude. Expensive refinery, very difficult. And of course, Venezuela has no money to pay, so you have to discount the crude. You discount the crude somewhere in the range of $10 to $20, so I can't tell you the exact number, but in that range, to pay for it. So now, if WTI Brent differentials are wider than that number, actually Venezuela will be better off. But if we go to our expected structural WTI Brent differential of $4, $5, then these will have cost Venezuelan people a huge amount of money. But you can't undo these things. If Mr. Maduro goes, you can't undo it. You've signed contracts, you've committed. Major investments are already in the works. So I expect that this will continue. And of course, please remember that Venezuela in oil production is not going up. So if it's not going up, then whatever goes out has to go out from somebody's imports. And of course, that somebody's import is the natural market which the US is. So then, of course, the issue of Middle East exports, which have a medium heavy crude, not really heavy crude, what the US defined is need really ugly crude. 20, 21 degree API and lower, that's what they really need. Middle East crude is not heavy enough. However, it's better than nothing. And certainly, if you have to blend it into the existing light streams to feed it to the cookers in the US, that would be OK. 50% of the cooking capacity of the world is in the United States. And they need heavy grades. So the need for the Middle East crudes have gone up. Saudi production exports have gone up. Kuwaiti exports have gone up. And that becomes heavily dependent in our view on what happens with additional imports from Canada. Canadian exports to the US mix with the US condensate. This is Benjamin mixed with condensate, which Canadians have these beautiful terms that we invented, the Dilbits. The Dilbits come at 20, 21 degree API range. And they are ideal feed for the cookers. Take the liquids out and put the bitumen inside the cooker. So this is what God wanted to do. Canadian bitumen into the US. We don't want to allow it to go to Keystone XL. It will come through different ways. It cannot be stopped. Those who believe that by stopping Keystone XL, somehow they would stop the Canadians from producing the oil sands. They don't understand decision making. These decisions are already in motion. For the next 10 years, additional volumes will come, whether we want it or not. So you have three things to do with Canadian oil sands. Either you bring it down to the US, which is what God wanted this to happen. Or you take it to the West Coast of British Columbia to export it. And at that stage, the First Nation Indian tribes have committed not to allow one drop of oil to pass through to the West Coast of Canada. Then the other option is to go a couple of thousand miles to the East Coast and export it, which may happen. It may happen if it cannot come to the US, but it will come to the US. It cannot be stopped. The economics are too overwhelming. So I think in a year or two, since we're asking for additional comments on the comments, on the comments, on the comments on Excel, that means that we give up on it. We don't need it anymore. It will happen by itself. I know trans-Canada will not be happy. But it will reach the US with two or three years. The later it reaches, the dependence will be on the Middle East story. That's the way the mathematics work. And when that volume starts coming in, then the dependence on the Middle East slowly goes down. But we have to remember, the Saudis have a million baros per day refining capacity in the US. Whenever they want to bring it in, they can bring it in. Of course, at the moment, they know that by selling it to Asia, they get a lot more money than they get from the US. So why would they come to $10 a barrel more? So they would have to be in the US only for political reasons. But they have the tools to make it happen irrespective of the market demand. But of course, if they bring it in, they have to compete with the Mr. Crudes. And the Saudis are very savvy. Today, the Saudis are telling their partners in Shell that you can just buy it from anybody. You don't have to buy my crude. But if you have to buy my crude, then I'll sell it to you at the market price of what competing crudes are. But they have the ability to show the US that the US still needs them. Although in terms of the economic realities may not be necessary to bring that crude. So our view is that impact the Middle East crude limited for the next two or three years, maybe four years. Post-2017-18, I think Middle East crude needs in the US can go down slowly but radically over a period of time. So Canadian policy would be more important than domestic US policy as far as the dependence on Middle East imports are concerned. There is, the US provides strong competition to the Gatari LNG. I mean, you know, sort of, we all had assumed that Gatari would be number one for many years to come. Now Australia is going to be number one and the US may go ahead of Australia. So there is, I think, big competition and big impact on the markets of the US exports and the way the US prices it. Although people are realizing that the exports from the US are not creating liquidity in the market. Actually, you have to sell them on a 20-year contract. So it doesn't really help liquidity, but it increases the total volume and the flexibility in the market. Potential supply of LNG to UAE and Kuwait. I think both UAE and Kuwait are looking at possibly importing from the United States. And I think they would like it. And I think US would like it. Maybe not all their needs, but part of the portfolio. There is a real desire to make that happen. Of course, the US has become a major competitor to the Middle East defined product exports. Because if you look at Europe, US exports to Europe are more important than the Middle East exports to Europe. Middle East is looking more at East. US has been looking at the Western markets. And of course, insofar as gas-based petrochemicals are concerned, US can offer a significant advantage, particularly because most of the people in the Middle East who want to do gas-based petrochemicals are running out of gas. They don't have it anymore. The Saudis using LPG and NAFTA because they're running out of gas. They need the gas for power and they're already short. So in a way, the US, on the basic petrochemicals, would have an advantage over them. So impacts on Asia, of course, are great. Crude availability for Asia. More African crudes are being offered because the US doesn't need African crude. Certainly, more condensates will be offered. And the condensates will make a big difference to the Asian market. Large exports of NAFTA can happen from the US if we split the condensate. What the Asians need are NAFTA. Terribly short of NAFTA. A million and a half barrels per day, we forecast shortage of NAFTA. That can come from either the condensate splitters or the condensate that the US sells that they would split over there. So between the NAFTA and the LPG that you can supply, the US can feed the massive petrochemical growth in Asia. So China now are exporting gasoline and diesel themselves. But before they can export petrochemical, there's another 15 years left. So you have a much longer life to feed that. So LNG, LPG, diesel refined products, gas-based petrochemicals, these all have homes in Asia. And many of the Asians would be happy to pay for it. So here I've tried to define for you what is the definition of the US power in the energy business. What are the impacts on different areas? And I've decided not to show you charts because if I have to show you charts, I have to bill you. So these are just the pointers to tease you, of course. Nobody in Washington ever pays anybody, right? Everything is for free. But there are significant possibilities in Asia for the US volume of products. And the number one issue today is get the condensate, definition right, get it out of the crude and get it exported out of the US. And if you're not exporting it, then let the industry know so they can build the splitters and do it on this side. But being left in the sort of state of suspension, I think, is not the right thing to do. Number two is, of course, the LPG exports continue. There is nothing anybody can do. It's just the time it takes to build the export facilities, the terminals, but it's already in motion and they make a global change in the system. And of course, on the oil side, get the Canadian story right. And that is, I think, has a huge impact. Now, I have talked about the Canadian oil sands. I have not talked about Canadian LNG projects. We have our friend from Alberta here, so he may throw some rocks at me. Canadian projects are a lot more expensive than the US projects. And as of today, zero sales. Lots of MOUs and HOAs, but no firm contracts. The only firm contracts from the new players are from the United States, where people have committed to buy. And although they have to resell it, but they have to pay for it. And these are in motion. It can no longer be stopped. For Canada, the most optimistic project, from my point of view, is Progress LNG, which is led by five state companies. Petronas is leading it. It has Sino-Peq, JAPEX. It has Indian Oil Corporation, Brunei government, and very soon, Taiwanese government. So you have government folks, which will go into this and make it as a strategic decision. If you have to make a strategic decision, then decision making becomes much easier. The future, in our view, is a future with lower oil prices. And lower oil prices mean lower gas prices. So anybody develops a project, it will only work in our view. If they can deliver to Asia at no more than $12 to $13 a million between you. If you can't do it, then you should wait. And I think a lot of projects which are being discussed in East Africa, in Canada, in Alaska, will cost more than that. Nobody is going to pay you. The governments don't sell and buy. It's the private sector who sells and buys. Korea gas buys it, but they have to sell it to private companies. They go outside and buy themselves. So we should not believe that because the government, Chinese government, can take it inside the system. But huge ramifications. Petrochina lost $6 billion of money last year on natural gas. To buy high, sell low. You can't do this too long, no matter how big and powerful you are. Bottom line is that we have to pay attention to economics. And if we don't pay attention to economics, things that people say they will do cannot succeed. If economics goes against it, the license from Adam Smith will not be given. And that is much bigger than FERC and DOE. Thank you very much. Well, thank you, Feridun, for, as usual, a great and provocative presentation. I didn't realize that we could no longer get the data for free. So when did that world change? This is very distressing. The American way. That's right, yeah. I've been in the US government. I was in the US government too long to expect to have to pay for things when the time came. So we've got time now for questions. I'm sure there are going to be a number of questions. And there are many areas that you touched on that, I think, provoke people's interest. One of the ones that I'd like to start with is you sort of teased us a little bit in saying that, well, it doesn't make much difference in what your crude price forecast would be without saying what that forecast was, except to say maybe it's going to be a little lower. A lot of debate going on now about the implications if we enter into a world where the US becomes an exporter, how does that change the trajectory? So I guess two questions. How do you see the pathway, because we can't pay for it, you don't have to tell us the price, but the pathway would be OK. And then how does that change if the US actually enters the market as a liquids exporter in a bigger degree? Actually, I don't think there would be a massive impact. If you export US bucking type of crude to the market, it'll sell in the market at Brent price. If the volume, and I don't expect a flood to happen, but half million barrels per day, one million barrels per day in the market might reduce the price of the dollar. I mean, it's not very dramatic. And the most of the exports which the market needs are the condensates. And the condensates will have a marginal impact on the crude price. So actually, not dramatic. Our view about the crude price is that in the $80 to $90 range, depending on if things settle with Iran and Libya, could be this year. If it doesn't settle, then it'd be two, three years down the road. But it is a conclusion which is hard to avoid, that the direction is down. And $20, $30, Dave, makes a big difference, big difference. For the conventional crude producers who still spend no more than $30 a barrel, and most of them, average cost probably still less than $15 a barrel, they're still printing money. But for those who have to do in the non-conventional, the massive rise in non-conventional costs would put many of them into jeopardy. A lot of LNG exporters would have to rethink the strategy. Those who want to build pipelines for gas would have to rethink strategy. And God forbid, renewable energy would have a very, very tough time with an $80 oil environment. But I think that we have a natural floor to the price of oil that we've never had before. But in $89 is a natural floor because of the way it would impact the non-conventionals. So we can go down, but $20, $30 make a huge difference in decision making today. OK, so let's open it up for questions. Just the usual ground rules. I get to say this one more time. Please identify yourself, your association, and then, if you can, work it into a question. But if you have a statement, just make that's OK. But if you could end with a question mark, that would be great. So we'll start right here. Microphones are coming up. I know we can hear you easily. Yes. Thank you very much. Good morning, and thank you very much for the excellent presentation. My name is Paolo von Schierach, editor of the Schierach Report. I was wondering if you could make some considerations, which are a little bit off the subject. And that is the impact of this energy revolution on the American economy. And in other words, is the shale gas revolution and the non-conventional oil, North Dakota, et cetera, et cetera. Again, changer as far as the US economic potential is concerned, or it's just one of the things that are happening that may, or as you correctly explained, affect global markets. And in particular, some have speculated that the US natural gas can be used as transportation fuel, in particular for heavy trucks. We're talking about the possibility, according to some estimates, of displacing 3 million barrels of imports. Do you see that as a realistic scenario? Does that make any changes? Does that really affect US imports from OPEC? Does that change something dramatically in the US economy or not in conjunction also, as you said, with Canadian crude, keystone, and all that? Thank you. Although I have a PhD in economics, I leave that to people who do macroeconomic analysis. And I'm sure Adam Smynsky and his group do this all the time. What does it mean in terms of the employment and new jobs? I leave that out. In terms of the impact on transportation, I think the impact is heavily exaggerated, in my view. Because at the end of the day, we have two things we determine, the gas for transportation, the price of Henry Hobb and the price of oil. Now, if we start exporting oil from the United States, then definitely the WTI price comes much closer to the international market. And if you have Henry Hobb prices rise a couple of dollars, then it's not so attractive. Any state that we've done on LNG for transportation in the United States is so heavily dependent on small movements of price. As of today, it's very marginal. Very marginal, I think. If you talk to the people who are doing it, I don't think anybody is making much money. But expectations, people have rushed into it, assuming that this is the new major savior. After one year of frenzy, we see it isn't. Now, if the oil prices keep going up and the gas prices stay down, it could be. But it could change very quickly. If you make a big investment in infrastructure and suddenly you have this market's turn, which we believe will turn, we believe Henry Hobb will go up and oil prices will go down. Now, how much will go up and down? We can debate. But any directional movement would make the LNG for transportation trucks not so economic. And if I've already made several billion dollars of investment in building infrastructure, then I'm caught with it. So I think this 3 million baros per day, this kind of thing, I think it's just pie in the sky. I would be very surprised if it becomes several hundred thousand baros per day, in my view, until we have a clear understanding of where the markets will settle. And we don't know where the price market will settle until LNG exports begin in the United States. Once they begin, then we have a few. I want to remind all of you that what happened in Australia? The price of natural gas in Australia in East Coast when the CBM to LNG project started was $3 a million BTU. They haven't started yet, but it's $8.50 today. And we are forecasting $11 by end of 2015 in Australia. Now, the Australian market is not as deep as the US. So we can't say the prices will quadruple here. But it is, I think, foolish to assume that everything leaves and everything remains the same. I just have a tough time buying that concept. But honestly, nobody knows. Because even the people, our clients, which are drilling, they don't know themselves. This is just the beginning. We will know in two or three years what happens to the client rates, what happened to liquids. But to assume everything is the same while we probably export close to one-fifth or one-sixth of the US total consumption of natural gas and everything remains the same, I think it's being extra optimistic. Paul Connors, Canadian Embassy, your thoughts on Russian natural gas supply, new pipelines getting to China or Asia markets and what that does to LNG in that basin? Next Monday, next Wednesday, Mr. Putin will be in Beijing. And there is a 50-50 chance of signing right now. Three months ago, the gap between the two prices was $5.50 per million BTU. As of two weeks ago, the gap is only $2. So the way it's worked is that the Russians have come down. I mean, they have started with the rack price, exactly what they're asking Ukraine. And then they came down. And the Chinese went up a little bit. The Chinese wanted to pay what they pay to Afghanistan. They have to pay a little bit more. I think there is a serious chance of signing an agreement. Now, the volumes are also in question. It could be three to four BCF a day. So it could be 21, 22 to 30 million tons of LNG equivalent. The Russians are asking for 30-year contracts. The Chinese would like to have 15 to 20 years. This all has to settle. But at the moment, it's a purely political negotiation between Mr. Putin and Mr. Xi. That's really what's left to do. The people at Gazprom and the people at CNPC have said their things, their peace, and we have a clear understanding of what each of them want. But the gap should be bridged by politicians. Now, is it good for both sides? Well, actually, it's still exporting to Europe and getting $8 is better for the Russians because the pipeline is already there. This is a huge pipeline. It could cost 20 billion. And it could take 10 to 15 years to build. From the Chinese side, it's not so good for them because once they get it, they're committed to 30 years. And we all know we're all clever for five years. Nobody's clever for 20 years or 30 years. Things change. I have seen it change many times. Things that I was sure is going to continue, reverse themselves. So to commit yourself when you are on stage of infancy with your shell gas development yourself and you don't know where your economy will go, this big volume is a very dangerous proposition. But I would give it 50-50, and we'll know by next Thursday. Just to follow up, it'd be interesting to know when you meet with CNPC and others, is that the advice you give them as well? I told them it was a bad idea. OK. Sarah. Thanks very much, Farid. I'm Sarah Ladislaw here with the Energy Program. OK, so I'm going to go out on a limb and ask you a somewhat provocative question, which is always dangerous with you, because even straightforward questions, you give provocative answers. So I'm very interested in how this is going to go. So you've decided that God is on the side of markets, and Adam Smith is giving out permits. But I've been at least three or four conferences in the last probably two or three weeks that have somehow decided that the world is less about economics these days and more about geopolitics. And you've just given a few examples of where politics is weighing in and geopolitics very specifically on some big energy decisions. Do you think that's sort of a near-term trend that is associated with the sort of events in sort of Russia, Ukraine right now, and sort of the place we are there? Or do you actually see some long-term credibility to this idea that there's some feature in the market these days that are driving people to make more politically or geopolitically driven energy decisions than maybe the past 10-year period that we've been in? Actually, I don't. You know, if the things are closed, then the geopolitics can push them together. But there are some things which are really stupid things to do. You can make bad things into good things by politics. I don't know, you remember how many times was George Bush and Vladimir Putin shook hands about exports of oil to the United States from Russia? It didn't happen because it shouldn't happen. And certainly in the U.S., President Obama or President Bush is not buying any oil or not selling any gas. You have to make the economics of it work for the private sector, no matter how much you can twist arms. Even in Russia, you can't go totally against the trend. So what the Russians actually are going to be, if they sign with China the price would still be higher than the price they sell to Europe. But in Europe, the price, the netback is much higher because the pipe is already done. So I think that it's the dangerous proposition that we say that geopolitics can solve our problems. It cannot solve it. And Washington is especially dangerous for this because you have all the congressmen, they say, well, let's make it happen. When are we exporting? Let's get them there. Let's teach the Russians a lesson. It doesn't work that way. Any LNG project from the beginning to the end, on average, is 10 years to start to the end. You can't say, well, by 2025, is Mr. Putin still there? He may be Gaga by that time, or somebody else may be sitting there. Who knows what happens to say that I do things, the impact of these things are long dated in the future. You know, I joke sometimes people say that oil is like dating, gas is like getting married. In oil, you can change your mind, but in gas, you cannot. You get stuck. You need a mortgage, a house, children. And the cost of separation is very, very high. So you have to know what you're doing from the beginning. And you have to leave room for price review. Of course, in marriage, you can't do price review, but you stay in a relationship, you have to pay the price. But by the same token, production of oil can go into surplus because nobody who produces oil thinks about where to sell it. I'll produce it and sell it later. It's a fungible commodity. There is an anti-surplus mechanism on the gas side because you have to sign with the customer first. And even if you're a big boy, like some of the majors, it's still 70% commitment you want. If you're a small independent, you want 95% commitment. Because otherwise the banks are not gonna lend you. That's the bottom line of it. So you need the customer. So you can have a surplus on the gas, but you can have a huge surplus on the oil side. So oil and gas are not brother and sister. They are distant cousins. It's very different behavior, different markets. And within this environment, the geopolitics, which requires a long speculative sort of commitments, is far less important than on the oil side that you can make a decision right away. Of course, the advantage of gas is that by the time the project happens, you're dead or gone. So nobody can be held responsible for what they've done. But if you are governments, you look for glory. If you're in the private companies, you look for cash. So some of these projects give glory. People will push for it and argue for it. $2, they can be bridged, but $5 could not be bridged. I think it's interesting, sort of as I look back on the time that I spent in government and have my colleagues here, Frank, and Guy and others who went through the 1980s watching the divorce action in the gas market in the US, I think you can really corroborate what you're saying, is it's very expensive to change that structure once it's locked into place. Okay, more questions here. Bill Murray with Energy Intelligence Group. I guess two questions. The first is, if oil is like dating in natural gas like marriage, what is condensate? I thought you were gonna say, what are the portfolio players? No, I'm not. No, condensate is basically, it's the beauty of it is that it's traded as crude. So the markets, it's sell it as crude. And there are three ways of pricing condensate internationally. One way is the Gattari model that essentially sell it Dubai based, plus or minus. One is the Iranian model that you say it on the price of NAFTA. And one is the Algerian model that you say it on the price of netbacks. But so far the highest prices have been obtained by making the crude based. Because what you can do with condensate is that you can split the condensate or you can blend it into crude, you put the refinery and produce more NAFTA. So there are a variety of things you can do with it. Today in the US, a lot of these condensates are just blended into crude. However, they get heavily penalized because NAFTA is not what the US needs. And the US refiners, they don't want it. And you can make the NAFTA into gasoline by putting more reformers, but you already have enough gasoline capacity from the catalytic cracker. So you don't need any more of that. So the incentives in the US to make a valuable product out of condensate is very limited. And we've talked to all our clients in the US with the refiners. Nobody cares if it's exported. As long as it is above a certain level of API which does not interfere with the world of glory that they have today. What about the idea that you were mentioning how the different relationships in markets should take precedence over the geopolitics that seems to be raising its head. But it isn't part of the issue that the US market change and the way it relates to energy is the biggest deal in 40 years in the marketplace. And as a result, people are losing their footing. One of the things that came out in the report that you'll probably read shortly here from CSIS is that Europe seems to be on the back foot under almost any situation concerning energy. And that it seems to be, and that that could have some really unintended consequences in terms of just politics in the future 20 years even between the US and Europe. What are your thoughts of that? I'm not sure what your question is. What is your question? I understand what you're saying. It seems the shale revolution is actually creating disconnect between the US and Europe and confusion as to what the real causes of political displacement is. I mean, the Russian-Ukrain issue is actually about European weakness, but it's being viewed as weakness on the Obama administration and perhaps even viewed in Asia as that way in the Middle East. So there seems to be a disconnect. We don't talk about Europe as a European community, but I mean, it's not a real country. They're different places and they have different things and different policies. And they are the economies which are in long-term decline. So, you know, it's a different world, the disconnect between them and the US would have happened anyway without the shale revolution. Now, what this does is that it gives a boost to the US to go forward. Nobody has the similar boost to give to Europe, so the gaps become wider. But I'm not sure, you know, what would have happened? Let's say there was no shale revolution. Still the Europeans would be in the same boat as they are. The price of gas would be still the same. The dependence would be still the same on Russia. Whatever the US produces in energy has nothing to do with Europe. Europe is not a market. It's not gonna go to Europe. There's no need for it. So what's the difference? What's the impact on Europe? Are we talking about impact on Europe or US? The US would have a boost because of the cheaper fuels. The refiner can say, okay, refiner's in the US, many of them would have shot down, maybe. Because they don't have the advantage. You don't have an advantage, but the separation from US and Europe in terms of gaps, in terms of the energy gap, I don't see how it's affected by the shale revolution. The boost to the US economy, yes, of course, is coming, but the Europeans would be exactly the same place as they were before. If the US prices were $9 a million BTU for natural gas, it wouldn't help the Europeans. US advantage of the competing in the market with Europe would have been less, but the US is in a competition with the powerhouses in Asia. Europe is a mature economy to be polite. Some more questions, or surely with this group, nobody wants to reveal themselves, I think. I know where you live. Sorry. It's possible that I may ask an additional question. On the, you mentioned in passing shale development in China. And of course we know, at least in terms of estimates, that there's plenty of shale all over the world, China being obviously the most important place with significant challenges for them, technological and geological to develop it. There's shale in Argentina, shale in South Africa. Can you see, or is this too far down the road that is impossible to forecast a global shale gas revolution which really, that then would really cause a real displacement for the traditional producers, keeping in mind what you just said about glut in LNG, et cetera, et cetera. If indeed China becomes a major producer, Argentina, et cetera, does that change things, or is it, we simply don't know? I think of course it will change, but you know, we're talking 15, 20 years. The issue at the end, we have to keep in mind that the perfect storm is in the U.S. Nothing could be more perfect than this. There's no perfect storm in Canada. Canada still has to produce and transport it. You have the swimming pool, the Henry Hop swimming pool, it's a wonderful swimming pool. You produce conventional gas, you throw it in the pool. CBM, you throw it in the pool. Tight gas, shale gas, you throw it in the pool, it's all mixed up, and it has a life. It has its own life. If you don't export it, it has a market, it has a life. Export is an offshoot, and if it becomes bigger, it impacts the pool. But the pool is there. There is no perfect storm anywhere else. In China, you don't have water. You have deep, deep for fracking. You have to bring in water and you have to go much deeper in the U.S. Plus, it's all in the farms. The farmers are up in arms. In the areas of drilling, all the chickens have stopped laying eggs. Do you know why? Tremors. In some of the areas, none of the animals mate. The farmers are really upset that since you're drilling here, my livestock is in turmoil. And in China, yes, of course, is an important strong central economy, but the provincial issues are very important. So you can't rush this kind of thing. In the UK, of course, everything is found in the farms. The issues of to do it in the same way that the U.S. has done is impossible. But can it be done over 10, 15, 20 year period? I'm sure it can be done. Then, of course, most of the places are dry. It's remarkable. You have some areas in Canada which are wet, most are dry. The whole of the Horn River is bone dry. In Australia, it's all dry. Argentina, anything that's found is dry. Poland, it's all dry. Now, we don't have enough history to know what else can be done, but without the liquids, I think, and without this fantastic infrastructure in the U.S., it'll be very slow. And we have to remember, this is a manufacturing process. In a manufacturing process, it takes time to do things. And you have to build in. In China, you have to bring in huge pipelines of water and then take pipelines of gas away in the middle of nowhere. So our forecast for China is that by 2030, 10 to 15% of the total gas production, not consumption production, will come from share. And later on, it may become more, of course, as the infrastructure is built, but it is at the moment just an American revolution. So, okay. Fred Lawrence, Independent Petroleum Association of America. What are your thoughts about Mexico in terms of expanding the North American energy footprint? Not as much looking at LNG, but also pipelines and natural transportation and some of the opportunities that that will bring for our energy market. Well, I forget now, it's four or six BCF a day of gas has been committed to Mexico in the long term. So maybe one day these pipelines will be reversed. Mexico will export gas to the US. We've seen this kind of things happen so many times, but today, Mexico pays as higher price for LNG as the Japanese do. $15 a million with you, they pay. They don't pay Henry Hub. They pay $15 a million with you. Argentina pays $15 a million with you. Brazil pays $15 a million with you, but all these contracts are short-term contracts. Short-term contracts in LNG is defined up to two years and medium terms two years to five years. So you have short and medium term contracts, but everybody assumes I get my act together and they probably won't and would renew it, but I don't wanna commit myself to the larger volumes. So the developments in Mexico, and we are now at the stage one of the new reforms in Mexico, and it's not done until it's done. This is still subject to many, many pitfalls. So if it goes forward, I think then they would take less from the US, they take refined products from the US, they take natural gas from the US. These they don't have to take. So it has an impact in the US. I don't see them as exporting it to the US, but they could be a much important global player. I think they should rightly be as one of the earliest players in the global system. A lot of opportunities have been lost. So I don't see that they would be a huge impact on the US, but some of these markets will disappear. What we sell to Mexico today would have to be used to be exported outside other places, and I think they would be, it would happen. And seeing how things work at a very slow pace in Mexico, I wouldn't worry about it for the next 10, 15 years. So I had a couple more questions that I was going to put on the table. In previous discussions, you've talked about Qatar's strategy in terms of selling LNG into the marketplace. I think the point you've made is their gas is essentially free when you take account of the liquids or close to that. So they have a country strategy not to over build. Do you see that changing? Because that can make a huge difference in terms of how the global LNG market evolves if they decide to now compete with new players and expand capacity. And then the other is we've gone almost an hour and a half and not talked about China and China oil demand. So what's happening in that area and what do you foresee in the next 10 years in terms of the growth of oil dam? I know that there are small questions. Well, on the Qatar side, the Qatar is the reason they're not expanding because it's not there. You know, sort of one day I was discussing with Herman Fransen and he was saying, but they have 900 TcF of gas. They can do a lot. So in the Middle East, all the countries, without exception, the numbers of oil and gas reserves, they just make it up themselves. There is no verification, no audit. We know there is a lot, so we accept it, but actually there is no certified numbers. I remember the time when the Iranian said that I have 100 TcF of gas in the Qatar and said I have 100. Then the Qatar said I have 200, I have 200, I have 300, 300. Then I said 500 I have. They said I have 500 too. And one day the former minister, I think had a little bit more, too much to drink and he said I have 900 TcF. The Iranian said that's a bit too high. I stick to my 500. That tells you something. But the reality is that you have one big plate and two people are eating from it. One is hungry and one is not hungry. One has stomach ache, cannot swallow. And that's the Iranian side. But when they eat, they will eat very fast. So the Qatari policy of keeping these volumes unchanged is the prudent policy, is the right policy that I want to have to, I want to know that I can supply my 20 BCF a day production for 20 years. So the idea of producing more LNG or producing more gas in the export market is not on. And in fact, what they do is that they essentially locked out, I hate to say this, with Fukushima crisis. Whatever they wanted to sell to the US, they sold to Japan and the immediate fear to Taiwan and Korea. 18 million tons committed in that market, which is about what they were hoping to sell to the US. So essentially they don't have that much extra. They have some volumes in the UK, I think they'd be happy to pull it out. There are four or five arbitrations with Europeans at the moment. By the way, Europeans always go to arbitration after an NVIDIA. It's a normal process. Not one arbitration has happened in Asia on the LNG business, not one. They think it's rude. When you promise, you have to do what you promise. So the guitarists sooner or later, they try and remove everything out of there and take it to Asia, but they don't want to do it in a way that disrupts the UK economy. So they don't have a lot of extra volume they'd have to worry about in terms of competing. They've already scored and they sold long-term. So until mid-2030s, they'll be okay. Now on China, we get lower percentages, but the absolute numbers are not that much lower. So base is becoming bigger and bigger. I think the demand growth in China about 300,000 barrels per day are an absolute number which is the only one we care about, absolute number. We don't care about percentages. Impact on the market is based on absolute numbers. This will continue for many more years. But in 2015, for the first time, we expect that the demand growth for oil in the Persian Gulf will be bigger than China. That China would be at 300,000 barrels per day, the Persian Gulf countries will go at 350. Of course, in Persian Gulf, they waste a lot of energy, sort of the more money you have in the Middle East, the more money you waste, handouts, low prices. The richer you become, the more subsidies you give, which is totally against the logic of need for subsidy. You can be in UAE, the Indians, which come from India to UAE. This is a great situation. I pay one eighth of the price of gas in UAE, then I pay in India. And one sixth of the price of petroleum product then I pay in India with subsidized prices in this area. So something is sort of wrong with the logic here. If I have money, I have to give it out. If I have less money, then I don't have to give it out. The people, people, you know, these arguments people make, what are the budgets or what are people are going to do with the budgets? The budgets in these countries are not real budgets. If you have less money, you waste less money. And if you have less money, people don't come to you and say, give me a handout. If you have more money, they ask for the handout. So these budgets have no meaning. At some point it hurts, but I would be surprised if the, I think the price would have to be $40, $50, I'm guessing, before it really hurts. It doesn't hurt. Less prices, you know, in 2010, the Saudi price in the budget was $50. So what happened between 2010 and 2014? There has to be $95. You just spend more and you have less to spend less. So in the Middle East, the demand will go higher. So they will become larger than China. And I think the, any kind of lower price of oil, reducing subsidies, that would make a big impact on the global oil demand. Global oil demand is driven by the Middle East, by those who produce the oil themselves, rather than by the global market as much. So you have lower oil prices, then you become more rational. The best decisions in the Middle East are taken at a time of lower oil prices. So then there would be less demand and they may be able to export more. So oil is becoming a luxury good. Yes. Yeah, exactly. I think it's one, I want to see if there's time for two more questions. So one here, is there another one? Okay, so one last question. Hi, Dave Ivanovich with Argus Media. You talked about exports of condensate and then the issue of the splitters being built here in the US. But I was a little fuzzy in terms of how you come down on the issue. With the demand for condensate in Asia, would it be more advantageous for the US to allow exports of condensate or would we be better off to go ahead and split the stuff and export the naphtha, which from a balance of trade perspective, which would be more advantageous for the US? Of course it would be much better to export condensate as is. As is because you send it outside. The reason you do the splitters is because you can't export it. And let's say I am an investor and we have many of our clients who are seriously thinking, should I go spend the money? You spend the money and then suddenly condensate, which was allowed to go out. So there's no need for your business anymore. So you are at risk already. Now these are not big dollops of money, okay? 100 to 100 million for the condensate splitter. If you put some serious infrastructure in place, you're talking 3, 350. So it's not like a 10 billion dollar liquefaction plans. Each of them could be 30 of these splitters. So, but it is still a big issue that shall I make it or not? But some of the producers themselves, and I think that's more important, the producers themselves said, look, why don't I build the splitter myself? Once they do it, then if it's allowed for export, still they will split because they've made the money, they would look really bad if they build the splitter and then shut it down a year after. So you can have some of these guys forcing themselves to be linked in to the splitters after they build it. So if we can get the condensate, the story is sorted out earlier, right? Later, it would be better for everybody. Well, Faridun, I want to thank you very much for coming. It's always great to have you here to provide a bit more of market realism in the building of a geostrategic think tank. So thank you very much for those insights and thank you for your long association with us. Thank you very much. Thank you.