Gas exporting countries have dropped the idea of creating a “gas OPEC” at a meeting on 9 April 2007, but said they will further look into the issue of gas pricing.
The meeting of major gas exporting countries decided to set up an expert group to examine issues such as the group’s performance, future developments and gas pricing.
The Gas Exporting Countries Forum (GEFC) unites countries, which together control around 70% of global gas reserves, such as Algeria, Brunei, Indonesia, Iran, Malaysia, Norway, Nigeria, Oman Qatar, Russia and Turkmenistan.
Qatari Energy Minister Abdullah al-Attiyah hosting the meeting in Doha dismissed the talk of a cartel and stated: “We should work towards greater cooperation to stabilise the market, to give confidence to our consumers.”
However, his Algerian counterpart Chakib Khelil said: “In the long-term we are moving towards a gas OPEC.”
The EU announced it would follow very closely the activities of the GEFC and will discuss the results of the meeting in bilateral energy dialogues. Energy Commissioner Andris Piebalgs stressed the importance of continuing dialogue between energy consuming, producing and transit countries aiming to ensure stability, predictability and transparency in the global energy market.
Unlike oil, gas is mostly traded on long-term contracts, often over 20-25 years, with prices linked to oil. Analysts therefore say the gas market is less likely to be cartelised like the oil is with the OPEC. Moreover, as gas is less easy to transport than oil and relies on a cost-intensive infrastructure, gas markets are likely to remain largely regionalised.
The next GEFC meeting is to take place in Moscow in 2008.