Iran still wants GECF to control global gas price

Iran says it will discuss the international gas prices at the first summit of the heads of state of the Gas Exporting Countries Forum (GECF), which will open in Doha, the capital city of Qatar on November 15.

Could Iran, holding almost 16 percent of the global gas reserves, influence the global gas prices in the current state of affairs?

Iran is the only member of the GECF, which unites Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago and Venezuela, who insists to control the international gas price by defining the protecting packages at the Forum. But to what extent does it rely on realities?

One can suggest the GECF with its eleven members holding 42 percent of the global gas production, 70 percent of the world gas reserves, 38 percent of gas pipelines and 85 percent of LNG trade is giant enough to influence on international gas markets by acting similar to OPEC in determining the oil price.

However, Iranian officials have been announcing that the Forum was established to control gas prices in the international market. Iran names international oil and gas prices unfair.

Iran's weight and goals in GECF

Iran, which possesses 33 trillion cubic meters of gas reserves, two billion cubic meters of surplus gas to export in year and owns only one exporting pipeline (Iran-Turkey) and zero percent LNG production, is ambitious to gain control on the gas market.

To great surprise, other key players of the market - Russia and Qatar, see the GECF as an entity to provide opportunities for making political coordination and technical cooperation among members.

Obviously, many factors exclude the possibility of defining a protecting package for gas prices. In particular, gas price depends on oil price, gas contracts are regional and long term (20-30 years), various types of gas (LNG, CNG, natural gas and etc.) exist and finally, storage opportunities lack.

LNG (liquid natural gas), which is the only type of "blue fuel" similar to oil, has the price differing from the region to region. For instance, the LNG price on Japanese market differs from Pacific basin.

Russian Energy Minister Sergei Shmatko said on Nov.13 that the GECF's ministerial meeting also spoke about the need to expand the organization's powers and areas of activity and pay attention to new technologies, deepen analytical and expert work.

From Iran's 'Gas OPEC' to GECF

Initiated by Iran in 2001 as an international 'gas cartel', the GECF has been renamed and gained a new mission massively. Iran lost the initiative completely.

Named as the Gas Exporter Countries Forum (GECF), instead of the "Gas Cartel" or "Gas OPEC" as proposed by Iran, GECF was established in 2009 with its headquarters in Qatar and Russian Leonid Bokhanovsky took an office of the GECF Secretary General for two years.

The first and second meetings of GECF Executive Committee have been held in Doha and Cairo, despite Iran's desire to host the meetings.


Dalga Khatinoglu
/Trend/