Fears over Russian plan for 'gas Opec'

Representatives of the world’s leading gas producers are discussing Russian proposals for greater cooperation, according to the Iranian Oil Ministry.

Ministers and experts from the Gas Exporting Countries Forum are meeting in Tehran amid speculation that members are considering an Organisation of the Petroleum Exporting Countries (Opec)-style club for gas producers.

The Iranian Oil Ministry’s website said the two-day meeting would consider a Russian “charter” that would include proposals for an international forum on gas prices and a supply network.

The idea of an Opec-style body for gas producers has caused concern in the United States and the European Union on security of supply and price issues. Russia has the world’s largest gas reserves, with Iran the number two.

On Monday Iran’s Deputy Oil Minister, Ali Kordan, said a gas producers’ group would protect the interests of producers and consumers. “This organisation will act as a policy-making organ and member countries can discuss such issues as the exchange of technology and reducing production costs,” he told his ministry’s website.
“The US opposition on the establishment of such an organisation is completely political in nature.”

Some industry experts argue that it would be difficult to replicate Opec in the gas industry. Many gas contracts are established on a long-term basis rather than traded on the spot market like oil.

“I can’t see a gas Opec working along the same lines as Opec,” London-based energy analyst Mehdi Varzi said.—Â

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