MIDDLE EAST: Gas exporters form high-level price coordination group in Doha

A forum of the world's leading gas producers in Doha has set up a high-level coordination committee for gas pricing, but did not form a gas cartel, Russia's energy minister said Monday. The Gas Exporting Countries Forum in the Qatari capital gathered representatives of 14 gas exporters, whose combined gas reserves account for 70% of the world's total. The participants included Russia, Iran and Kazakhstan.

"A decision on forming a gas cartel has not been adopted," Viktor Khristenko, also Russia's top delegate at the forum, said, adding that the committee would prepare the agenda for the next meeting and draw up proposals on forming a secretariat of the forum.

Some media said the decision to form the committee could be the first step on the way to a gas cartel, which has been proactively mulled in the press but denied by Russian officials. The idea of an OPEC-style gas cartel was proposed in January by Iran, the world's second-largest gas producer after Russia.

But Khristenko made an evasive comment on the committee formation: "It [the committee] will make sure that decisions adopted by competent people, ministers in this case, are implemented."

Before the Doha forum, the official said a gas cartel made no practical sense as almost all gas supplied to global markets these days was sold on the basis of long-term contracts.

Following the forum, Khristenko said gas market globalization required a coordinated position in the energy dialogue between consumers and suppliers, and said Russia was ready to be a coordinator in the high-level group in terms of gas pricing.

"Gas pricing is very important. It is crucial to begin studying the issue, and Russia is ready to start the process," he said, calling for transparency in gas pricing for both gas consumers and suppliers.

The chief executive of Russia's natural gas giant Gazprom, Alexei Miller, said the committee for gas price coordination was an important step toward international cooperation in the sector.

"It is a totally new form of an energy dialogue," Miller said, adding that the gas cartel issue had been on the agenda.

The forum aroused serious concerns among gas consumers, particularly in the West. European Commissioner for Trade Peter Mandelson said a gas cartel could be a misleading signal for gas consumers, while U.S. Congress woman Ileana Ros-Lehtinen said it would be a long-term threat for global energy supplies, and would negatively affect Russian-American relations. She called the gas cartel idea a global instrument for extortion and racketeering.

The next, seventh forum of gas exporters will be held in Moscow in 2008, Khristenko said.

"Our delegation's proposal to hold the next forum of natural gas exporters in Moscow next year has been endorsed," the minister told journalists after the forum ended.



Baja