ABU DHABI: Qatar, which has the world’s third-largest natural gas reserves, has said a form of cartel between producers of the fuel is unlikely.
Setting up an organisation for natural gas exporters like Opec is impossible, the Kuwait News Agency (Kuna) yesterday quoted HE the Second Deputy Premier and Energy Minister Abdullah bin Hamad al-Attiyah as saying.
“We do not see the need for the creation of a gas organisation (similar to Opec) because the issue of gas is more complex,” Attiyah told reporters in Abu Dhabi.
Qatar is a member of the 11-member Organisation of Petroleum Exporting Countries (Opec) and has natural gas deposits, estimated at 910tn cubic feet. Qatar’s oil deposits are estimated at 13.2bn barrels.
Russian President Vladimir Putin said last week that forming a grouping of gas producers similar to Opec was “an interesting idea”.
Russia holds the world’s largest gas reserves, followed by Iran and Qatar. Iran is a net importer despite its vast resources, but has ambitions to become a major exporter. The three countries’ reserves are equal to 56% of the global total, according to figures from BP.
Iran’s supreme leader Ayatollah Ali Khamenei had suggested that the countries joined forces to control the price of natural gas.
But al-Attiyah said a gas group was unlikely because the fuel was sold under contracts that can last for as long as 25 years, Kuna cited him as saying on Sunday.
Yesterday, however, Iran’s Oil Minister Kazem Vaziri-Hamaneh said gas exporters would discuss forming an Opec-like group at a meeting in April
Al-Attiyah said that Qatar would be hosting a conference in April of gas exporters that hold 70% of the world’s reserves.
“In the next meeting of the gas exporting countries they will decide about a gas Opec,” Vaziri-Hamaneh told Iran’s oil ministry website Shana.
Iran’s Hassan Moradi, a member of the parliament’s energy commission, had said last week that Algeria, Morocco and Venezuela between them have enough gas to make such a grouping viable, even without Russia.
But al-Attiyah said he saw no need for an Opec-style group, and that gas exporters should concentrate instead on developing the Gas Exporting Country Forum (GECF).
“We have a forum that brings together gas exporting countries that will meet next April in Doha and we should develop this.”
On Sunday, Vaziri-Hamaneh said the creation of a gas Opec would need the go-ahead from the world’s biggest gas exporter Russia.
The GEFC was formed in 2001. Member countries include Algeria, Bolivia, Brunei, Egypt, Indonesia, Iran, Libya, Malaysia, Norway (as an observer), Oman, Qatar, Russia, Trinidad and Tobago, the UAE and Venezuela.
The group accounts for around 40% of global gas output and 70% of reserves.
The GEFC did not meet last year. Since it was formed, the balance of power in gas markets has swung from buyers to sellers as demand has grown and concerns about security of supply have increased. With power in their hands, exporters have had little incentive to get together to fight their corner.
Some analysts say the fragmented nature of the gas market, with supplies to different regions sold under long-term contracts priced against oil, make it unlikely exporters could find enough common ground to work together like Opec producers – at least in the near term.
But the emergence of a world spot market in liquefied natural gas could create a global price and eventually form the basis for closer co-operation between some producers, they say.
“Basically the gas-exporting countries are too different, with competing, not complementary, interests (to form a gas Opec),” Jonathan Stern of the Oxford Institute for Energy Studies said.
“The emergence of a global LNG market could create the conditions for a group of like-minded exporting countries, but that will be some way in the future,” Stern said. – Agencies