#34 - JRL 2008-17 - JRL Home
'Gas OPEC' could be established in June - paper
MOSCOW, January 24 (RIA Novosti) - Russia and other major natural gas
exporters could announce a cartel similar to OPEC in Moscow in June, a Russian
business daily said on Thursday.
Kommersant said, however, citing analysts, that even if the gas cartel was
formed it would be unlikely to immediately achieve a comparable level of global
influence to that enjoyed by the Organization of Petroleum Exporting Countries
in the oil business due to U.S. and EU opposition.
Members of the Gas Exporting Countries Forum, which control 73% of the
world's gas reserves and 42% of production, held a session in Egypt on Wednesday
and plan to discuss a charter of the new international organization based on the
principles guiding OPEC at its next session in June, the daily said.
The draft charter was proposed last year by Iran, which has the world's
second largest gas reserves and is in need of new export markets, the paper
said.
Unlike the oil market, there is currently no price coordination in gas
dealings. Prices are individually negotiated for five years per contract between
producers and consumers. Membership in a gas cartel would give exporters greater
clout and a stronger presence on Asian and European markets.
Russia's Industry and Energy Ministry made changes to the draft charter and
submitted it for coordination with other ministries in November after a GECF
session in Doha, Qatar, in late October. The Foreign Ministry and Economic
Development and Trade Ministry have criticized Iran's draft over negative
political consequences it could trigger, the paper said, citing government
sources.
Gas producers plan to finally coordinate their positions on the charter in
Moscow, which experts quoted by Kommersant warn could trigger fresh tensions in
relations between Russia and the United States.
Washington has labeled the brainchild of some of the world's least democratic
countries as a security threat and said it was designed for "extortion". The
founding fathers of the 'gas OPEC' would be Russia, Iran, Qatar, Venezuela and
Algeria.
An analyst with the Troika Dialog investment said an organization of gas
exporting states would be created in the next few years, but it would have no
major influence on the market due to fierce opposition from the U.S. and Europe.
"The exporters will have to take an evolutionary, rather than a
revolutionary, way to the gradual consolidation of efforts," Valery Nesterov
told the newspaper.
A senior Russian Industry and Energy official told Kommersant it was not
clear whether the emergence of the cartel would be announced at the Moscow
forum.
"Talks on a new gas pricing policy have been conducted and producers' and
consumers' demands have been coordinated, and recommendations on investment in
the gas industry have been discussed," Stanislav Naumov admitted, adding that
this did not mean that Iran's proposal enjoyed unequivocal backing.
Russia's gas giant Gazprom has given no official comments on the Iranian
initiative, Kommersant said.
The Gas Exporting Countries Forum was set up in 2001. It has no charter,
clear membership structure or representation in any country. Its permanent
participants include Algeria, Bolivia, Brunei, Egypt, Indonesia, Iran, Libya,
Malaysia, Oman, Qatar, Russia, Trinidad and Tobago, the United Arab Emirates,
and Venezuela. Norway is an observer.
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