March 19, 2007
Venezuela, Algeria, Qatar, Iran and Russia are launching 'gas OPEC'

(El Universal) - "Five of the world's largest oil producing countries -Venezuela, Algeria, Qatar, Iran and Russia- are launching an 'OPEC of gas' during an energy conference to be held next April 9 in Doha, said Russian Kommersant newspaper quoting Arab diplomatic sources.

The meeting of the Forum of Gas Producing Countries, scheduled since a long time now, will be a good time to announce the creation of a real cartel of gas, the newspaper added without disclosing the sources, AFP reported.

The sources assured that the parties are about to reach an agreement.

The countries founding the new energy organization would be Algeria, Qatar, Iran, Russia and Venezuela, Kommersant explained, and highlighted a number of statements some authorities in these countries have made favouring the creation of this group.

Energy experts rather believe that creating an organization of gas exporting countries -or OPEC of gas- is virtually impossible given the particularities of this market, which is tighter than the oil market.

Natural gas is traded in financial markets, but only in a small proportion. Gas is mostly traded under very long-term bilateral client/supplier agreements that generally match oil prices.

Further, the gas market is quite regionalized, as this product is hard to transport, unlike oil".