Gas states form forum

MOSCOW: Gas exporting states yesterday finalised the creation of a new Qatar-based forum aimed at co-ordinating gas policy.
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 Qatar and Iran 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.
Doha beat off competition from Putin’s home city of Saint Petersburg and Tehran to host the headquarters.
Forum officials emphasised that the purpose of the meeting was to approve the charter rather than create an Opec-style forum 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.
The deputy chairman of Gazprom, Alexander Medvedev, described the forum as a “gas Non-Opec”.
“There are no mechanisms which the ‘oil Opec’ uses which could be applied to the gas market. Quota arrangement is impossible in the gas market in principle,” he said.
The indexing of gas prices to the oil price and infrastructure factors make the gas market far more rigid than its crude equivalent.
In his keynote address, Qatar’s Deputy Prime Minister and Minister of Energy and Industry HE Abdullah bin Hamad al-Attiyah noted that Qatar hosted the Ministerial Meeting twice, in 2003 and 2007.
He said the high-level committee constituted during the last meeting 2007 had worked on finalising the forum’s statute and the procedure for the establishment of the General Secretariat. An important study on global gas supply and demand was conducted during that period.
This meeting is taking place at the end of an exceptional year, during which the world witnessed dramatic changes in the energy markets and in the global economy as a whole, he said.
The world witnessed growth in natural gas demand in the recent past, al-Attiyah said, explaining that China and India as well as the Middle East were the main centres for this growth in demand.
He announced that with one of the new LNG trains fully operational in 2009, Qatar’s LNG production capacity will be close to 39mn tonnes a year. This figure will almost double to 77mn tonnes a year in less than two years from now. – Agencies