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Gas producers take first step towards group on price control

Gas producers take first step towards group on price control
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First Published: Wed, Apr 11 2007. 12 31 AM IST
Updated: Wed, Apr 11 2007. 12 31 AM IST
Doha: The world’s biggest gas producers agreed to set up a committee to look into pricing, in what could be the first step towards setting up an Opec-style group to control supplies. Opec (Organization of Petroleum Exporting Countries) is a group of 11 oil-producing nations.
Energy ministers from Russia, Iran and Qatar—holders of the world’s biggest gas reserves—and envoys from 10 other nations, met on 10 April in Doha, the capital of Qatar, for the Gas Exporting Countries Forum (GECF).
They agreed to set up a working committee that will examine the relationship between producers and consumers as well as pricing. Asked if this could pave the way to an eventual cartel similar to Opec, Algerian energy minister Chakib Khelil replied: “Maybe in 10 to 15 years, we see the possibility of an organization that would be effective in this market.”
“The pricing ambitions of producers won’t be realized unless gas becomes much more portable,” said Chris Weafer, chief strategist at Alfa Bank in Moscow. Still, there will be concern among consumers that their future gas needs “will come at a much higher price”.
The European Union, which relies on Russia for a quarter of its gas, has warned that a group modelled on Opec may spur consumers to switch to alternative sources of energy. Natural gas consumption worldwide will rise to 182 trillion cu. ft in 2030 from 95 trillion cu. ft in 2003, according to the US energy information administration.
Russia, the world’s biggest energy supplier, will chair the working group and host the next meeting of the gas forum, energy minister Viktor Khristenko said.
The goal is to achieve “predictable, stable and transparent” prices, Alexei Miller, chief executive of OAO Gazprom, Russia’s gas export monopoly, said. “It’s a step towards much closer cooperation.”
Qatar’s oil minister had earlier attempted to play down concerns over the future direction of the group.
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First Published: Wed, Apr 11 2007. 12 31 AM IST
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