Don't miss




Backstage at the Moulin Rouge

Read more


Video: Hero or dictator? Ugandans divided over Idi Amin Dada’s legacy

Read more


Sobel Aziz Ngom: Mentoring the next generation of African leaders and entrepreneurs

Read more


Uganda's Bobi Wine returns home

Read more


Brexit plan panned by EU leaders

Read more


Europe's biggest port gears up for Brexit

Read more


EU's mounting challenges: European unity faces test over migration

Read more


Writers Lauren Groff and Michael Chabon on Trump, marriage and being a parent in 2018

Read more


US Supreme Court: Brett Kavanaugh's confirmation in turmoil

Read more

Exporting countries give birth to 'Gas OPEC'

Latest update : 2008-12-24

Russian PM Vladimir Putin said the "era of cheap gas" was over, prompting fears that a newly created Qatar-based forum aimed at coordinating gas policy could turn into an equivalent of oil cartel OPEC.

AFP - Gas exporting states on Tuesday finalised the creation of a new Qatar-based forum aimed at coordinating gas policy that consumer countries fear could become the gas equivalent of oil cartel OPEC.

Russian Prime Minister Vladimir Putin warned at the meeting of ministers from the Gas Exporting Countries Forum (GECF) in Moscow that the "era of cheap gas" was over and that consumers would face higher prices in the future.

"A new organisation has been born today.... The charter has been agreed. The headquarters will be in Qatar," Russian Energy Minister Sergei Shmatko said after the meeting.

The forum groups Russia, the world's biggest gas producer, with other gas-rich states such as Iran and Qatar and a dozen other gas-exporting countries.

The GECF had been dreamt up at a meeting in Tehran in 2001 and ministers have met annually since then. But this was the first time the organisation's basic rules have been agreed and a headquarters established.

The Qatari capital Doha beat off competition from Putin's home city of Saint Petersburg and Tehran to host the headquarters.

Forum officials were at pains to emphasise that the purpose of the meeting was to approve the charter rather than create an OPEC-style cartel to fix prices.

"We would like to again stress there is no need to directly associate the newly created organisation with OPEC," said Shmatko.

"Therefore we will certainly not be discussing today the need to agree on levels of gas production. Our view is much broader."

Putin's warning over more expensive gas came amid a weeks-long standoff between Ukraine and Russia over Kiev's debts to Russian energy giant Gazprom and the price it should pay after the New Year.

Gazprom supplies a quarter of the European Union's gas, mostly via Ukraine.

"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.

Russian energy giant Gazprom maintains that Ukraine's state gas company Naftogaz owes it up to 2.4 billion dollars (1.8 billion euros) in debts and has warned of delivery cuts if the outstanding debt is not cleared.

Ukrainian President Viktor Yushchenko said Ukraine could return gas now stored in underground reservoirs to Gazprom as part of a debt repayment.

"Either we pay for the gas we have stocked or we change the owner of the gas," he told a press conference.

Analysts say that a cartel for natural gas makes far less sense, since gas exports generally require the construction of capital-intensive pipelines and contracts are signed over long-term periods.

Oil exports, on the other hand, are generally based on a spot market price to the barrel for delivery within relatively short timeframes.

The forum groups Algeria, Bolivia, Brunei, Egypt, Indonesia, Iran, Libya, Malaysia, Nigeria, Qatar, Russia, Trinidad and Tobago, the United Arab Emirates and Venezuela.

Equatorial Guinea became a full member of the forum at the meeting, while Kazakhstan was granted observer status. Norway also attended the meeting as an observer.

Russia, Iran, Qatar, Venezuela and Algeria between them control nearly two-thirds of the world's gas reserves and account for 42 percent of its production.

Date created : 2008-12-24