 Good day, firm investors. We have already discussed oil and the prospects for oil, where it's all about cost. And we have discussed a few of Sett-Klarman's investments, among which one is Cheniere Energy, an LNG US exporter. So the fact that Sett-Klarman is invested in natural gas and LNG, liquefied natural gas, made me want to research more into the field to see where does Klarman see the value. So in this video I'll share my research, I'm not a professional on natural gas, my research that gives an overview of the industry, what's going on, mostly in the long term, in the short term. Specialists really focus on little things that might not have an impact, but the long term picture is what comes for non-professional, non-trading investors. So in this video I'll give an overview, then we'll do a video on Cheniere Energy and then you can expect a third video of the natural gas series about gastronomy. So don't forget to subscribe to get the videos in your feed. Let's start with the price of natural gas. You can see how there is a big difference in pricing between the US, the lower green line, between Europe, the middle red line, and Japan, the highest blue line. On top of it, natural gas prices are close to their decade lows, a little bit rebounded since the drop in 2016. So the first thing you have to know is that a big part of natural gas costs comes from transport, therefore it's extremely important to see where is the producer, what's the distance between the producer and the main markets in order to see who has the advantage. A little bit different story than oil. Going back to the price, what's the reason for this huge drop in prices? Well, US shale oil and gas that has really distorted the whole picture for natural gas, because from a country that was expected to import natural gas in 2005, US became one of the largest exporters. And of course, Shenier Energy was first planned to be an importer of liquid natural gas in 2005 and then switched to exporter thanks to the shale gas revolution. Very interesting fact and shows how things can change pretty quickly in a decade or less. So let's take a look at natural gas. The situation for oil isn't that positive, but for natural gas it's very very positive, because natural gas emissions are just a quarter, for example, if you make electrical energy, then coal emissions. And as all governments tend to go towards less emissions, natural gas is a very very attractive source of energy. On top of it, what's important for natural gas and for your returns and investments in the next 15 years is this chart. The middle class expansion is exploding and the middle class, the class that consumes natural gas and many other things, will double in the next 15 years. Just check this chart, India, huge explosion, China tripling and the rest of the world growing significantly. What does this mean? Not only for natural gas, of course, natural gas, higher middle class, more consumption, more energy, more heating, more cooling, so much more need for natural gas. Just a bit of topic, doubling of middle class, more cars, more everything, more toothpaste, more coffee, more television and that's going to double in the next 15 years. Be sure to be invested in the right assets that will take advantage of that jump, especially India, that will see its middle class increase, I don't know, 10 fold in the next 15 years. Much more Basmati eaters for sure. Going back to the human development, the higher the human development, the higher is the need for energy and fuel. And you can see how India is still far below average country levels. Here we have the chart for natural gas demand and you can see how electricity generation is going to grow, industrial demand is going to grow and transportation a little bit, also residential and commercial demand, but mostly electric energy and industrial demand. So in the next 20-25 years up to 2040 demand for natural gas is expected to grow 45%. And that's expected to grow in all regions except in Russia. They are already using what they need for their natural gas. Now you might get excited about this huge growth, 45% is a lot. If it wouldn't be for the energy saving technologies then the growth would be 100%. So you might be excited, oh that's a great investment. However on the supply side it doesn't look that great. The shale revolution has doubled the reserves and resources of natural gas. This means that there is plenty of natural gas to cover the next 200 years of consumption at these levels. So there is enough. There won't be a supply gap like we are seeing in copper or zinc. So that's a little bit different investment approach than when you know it's a supply gap coming up. Now let's see what are the main exporters and importers. Europe will import even more natural gas. That's good for a company like Gasprom, which is the main exporter in Europe. North America will become a net exporter. That's good for Chaniere Energy and their LNG. And Russia will also be the main exporter, Middle East growing exports, mainly imports of course China, Asia Pacific and India. Asian Pacific demand will drive especially liquefied natural gas trade, because when natural gas is liquefied it takes 600 times less volume. So it's much easier to ship. And there are of course Chaniere investing a lot of money to liquefy the gas and export it, in this case from the US. And we have the Shackalin program for Gasprom and other pipelines which are not liquefied. So there are a lot of plans, a lot of developments and it's interesting how these developments will work out in the next 10, 20, 40 years. It's all very long-term projects that we are talking about. So to conclude, demand is going to grow 40% in the next 25 years. It's expected. Supply there is plenty of gas. So what we have to look when there's plenty of something is the lowest cost producer and those producers that have a moat. US natural gas production is very low cost. So even with the additional cost of transporting the gas around the world with LNG, it looks like that production has a moat and that export LNG has a moat. So that's why Clara invested in Chaniere. I'll make a video about Chaniere coming up in the next few hours. Secondly, we have Gasprom on the other side. We have Australian gas producers. So there is a lot of gas production going on and if you want to invest, you have to see, okay, which one gives me the less risk with the highest return. So the natural gas environment is positive. Thus limits the downside risk. Of course, margin of safety is set clear. And the upside is always volatile. So a good idea might be to invest or to trade around the long-term trend. In times of pessimism, low natural gas prices or hot winters, you buy and you sell in times of optimism around the long-term trend. The same as Seth Klarman is doing with Chaniere. Buying more low and then rebalancing when the price is higher. We know the long-term trend. Therefore it's a good trading strategy perhaps. For the long-term investors, please check my videos on Chaniere and Gasprom coming up. Other natural gas companies to watch are Gasprom, ExxonMobil, China National Petroleum, Royal Dutch, BP, Total Chevron, Anistata, Konopco, Philips and many, many other smaller ones. So a very interesting environment for those who want to dig their teeth in natural gas. Thank you for watching. I'm just sharing my overview, my research on natural gas with you. As I said, I'm not a specialist. I just want to see okay, what's going on, can I make some money and what are the long-term trends on it. Don't forget to subscribe. Looking forward to your comments. Please leave your insights in the comments below. Click like if you enjoyed the content and I'll see you in the next video.