Energy ministers of 12 gas exporting countries flew to Moscow on Tuesday to create a formal group, which they say will not control output and prices as feared by energy consumers in the West.
A so-called “gas OPEC” will be created on the base of an informal club called the Gas Exporting Countries Forum (GECF), which includes 16 states such as Algeria, Iran, Qatar, Venesuela, Indonesia, Nigeria and others.
Western consuming nations, worried that the group will set gas prices, are closely watching the meeting, which will be chaired by Russia’s Prime Minister Vladimir Putin and is backed by President Dmitry Medvedev, who will host a dinner at the Kremlin on Tuesday evening.
The forum members deny they are going to control prices and say the main goal of the new group will be monitoring the gas market and conducting joint research. “A more formal collaboration has always been part of our agenda,” Nigerian Petroleum Minister Odein Ajumogobia told Reuters. “The state of gas development is very different from oil. With oil you have one international oil price, with gas you have domestic, international export price, etc,” he added.
Russian officials have said the ministers would agree on a charter, that would make GECF a more formal organization with a headquarters in Russia’s second largest city of St Petersburg, although the body would keep the same name. Russian Prime Minister Vladimir Putin on Tuesday warned consumers that the “era of cheap gas” is coming to an end, in a keynote speech to a meeting of gas exporting countries in Moscow. “The expenses necessary for developing fields are rising sharply, and this means that despite the current problems in finances the era of cheap energy resources, of cheap gas, is of course coming to an end,” Putin said.
Russia’s Gazprom, the world’s largest gas producer, which supplies Europe with a quarter of its gas needs, earlier this year signed a deal with Iran and Qatar, setting what it called a “big gas troika” to coordinate market policies, but denying it was seeking to influence prices.
Russia, which is also the world’s No 2 oil exporter, has said it is considering all options including joining the Organization of the Petroleum Exporting Countries to defend its national interests. But it offered no cuts or special deals to OPEC at a meeting in Algeria last week. (The Economic Times)