Gas powers move towards cartel in long term
The Gas Exporting Countries Forum, at its first meeting in two years, decided to establish a group of experts to study how to strengthen the previously toothless group.
"I think having such an organization for the gas exporting countries is beneficial to all sides," Iranian Oil Minister Kazem Vaziri-Hamaneh told reporters after the opening session.
"But the process is a lengthy one as it was with the OPEC," AFP quoted the minister as saying.
Hamaneh brushed aside opposition from the United States and other Western consumers.
"They have not understood the essence of the idea ... It's not against any group," he said. "In the long term we are moving towards a gas OPEC," Algerian Energy and Mines Minister Chakib Khelil said. "It will take a long time."
The study group, spearheaded by the world’s leading gas exporter Russia, will look at pricing, infrastructure, and the relationship between producers and consumers, ministers said.
It will report back to the gas forum’s next ministerial meeting in Moscow in 2008.
The energy minister of Qatar, host to Monday’s meeting and home to the world’s third largest gas reserves, placed the emphasis on improved dialogue between producers and consumers.
"We should work towards greater cooperation to stabilize the market, to give confidence to our consumers. We should send a very positive statement to our customers that we are with you, not against you," Abdullah bin Hamad al-Attiyah said.
He took exception to use of the term cartel, saying he preferred club or group.
"I hate the word cartel," he said.
Russia also rejected the implication producers would collaborate at consumer expense.
"We do not, and will not, set ourselves the goal of ganging up on anybody. It would be destructive and it would make no sense at all," Russian Energy Minister Viktor Khristenko said ahead of Monday’s meeting.
Venezuela, also backed a gas version of the Organization of the Petroleum Exporting Countries (OPEC), and together with fellow South American energy producer Bolivia, is also striving to set up a regional cartel.
"I think it is a very good idea. Gas is the second source of energy in the world," said Rafael Ramirez, energy minister of Venezuela.
"We need to defend our interests."
Regardless of their stance on turning the gas forum into an OPEC, all ministers have said the idea was not yet practical because gas has yet to become a globally traded commodity.
Although gas is usually priced in long-term contracts and on a formula derived from oil, Algeria’s Khelil said the market was changing as gas gains in importance and the energy mix evolves.
"The world has changed. Now we have lots of things that people did not talk about five years ago. We have wind and solar and all these things are connected to gas," he said.
Analysts view the advent of liquefied natural gas (LNG) as a move toward a more global gas market.
LNG is gas cooled to liquid form so it can be shipped to various markets and is far more flexible than pipeline gas, which is supplied to long-term customers.
Since last year, when it snatched the number one position from Indonesia, Qatar has been the world’s leading LNG exporter.