Gas powers not rolls out gas-OPEC, seeking more clout

The Gas Exporting Countries Forum, at its first meeting in two years, decided to establish a panel of experts to study how to strengthen the previously toothless organization. The study group, chaired by the world's leading gas exporter Russia, will look at factors including pricing, infrastructure and the relationship between producers and consumers.

It will report back to the gas forum's next ministerial meeting in Moscow in 2008.

The energy minister of Qatar, host to Monday's meeting and home to the world’s third largest gas reserves, placed the emphasis on improved dialogue between producers and consumers.

"We should work towards greater cooperation to stabilize the market, to give confidence to our consumers. We should send a very positive statement to our customers that we are with you, not against you," Abdullah al-Attiyah said.

He took exception to the term cartel, saying he preferred club or group.

"I hate the word cartel", he told reporters on the sideline of the meeting.

Russia also rejected the implication producers would collaborate at consumer expense. Iran denied that the world's largest natural gas exporting countries intend to band together as a cartel.

Venezuela, a political ally of Iran, backed a gas version of the Organization of the Petroleum Exporting Countries (OPEC), and together with fellow South American energy producer Bolivia, is also striving to set up a regional cartel.

Neither Iran nor Venezuela is a gas exporter, although they hold large reserves that they are expected to develop eventually.
By contrast, Russia needs to reassure customers it is reliable, analysts say, as the leading gas supplier has twice halted energy exports to Europe in pricing disputes with transit countries.

The meeting of gas producing nations energy ministers on the idea of an OPEC-like cartel alarmed importers that the suppliers will fix prices for natural gas.

Russia, Iran, Qatar, Venezuela and Algeria- avowed supporters of an OPEC-type cartel for gas - are also supported by Trinidad and Tobago.

The US and EU couldn't conceal the deep concern over establishment of a diverse union of gas producers aiming to stop competition between each other.

The Gas Exporting Countries Forum established in 2001 by Russia, Algeria, Venezuela, Egypt, Indonesia, Iran and the United Arab Emirates, holds "in hand" around 60% to 65% of global gas exports.
Two month ago, Russian President Vladimir Putin and Qatari Emir Sheik Hamad bin Khalifa Al Thani said they would study the prospects of the creation of a natural gas cartel to represent the interests of producer countries to influence the global market.

Russia and Qatar are two of the world’s largest producers of natural gas, and tiny Qatar sits atop the world’s single largest gas field. Because of growing demand and lessening supplies, the United States has increasingly relied on natural gas imports in recent years.

European Union leaders said they would stand against any effort by Russia to create a gas cartel, fearing energy prices -- and Russia's political clout - could rise dramatically as a result. Europe gets up to 40 percent of its natural gas imports from Russia and some come via liquefied natural gas tankers from Qatar and Nigeria.

According to Eurostat, the European Union currently imports 40 percent of its gas, and by 2030, it is likely to rise to 70 percent. At present, Russia supplies 32% of the EU needs. 80 percent of Russian gas exports are carried via the Ukrainian pipeline network, the rest of it through the construction of a pipeline linking Germany via Belarus and Poland.

The remainder of the gas imported into the European Union comes from Norway, Algeria, Nigeria and Qatar.

A number of EU states like Belgium, Luxembourg, Ireland, Portugal, Spain, Sweden and the UK import little or no gas from Russia at present. Denmark remains self sufficient while Norway and Holland are net gas exporters. Countries like Greece, Finland, Bulgaria and Lithuania import more than 95% of their gas consumption from Russia.

Iran put forward the idea of establishing a gas OPEC. In January, Iran - which is dynamically advancing its gas industry - said it favored forming a cartel.

The so-called Gas-OPEC was expected to join the countries producing and exporting more than 70 percent of world gas supplies.

/APA/