Monday, April 09, 2007

By Andrew Walker
Economics correspondent, BBC News

Gas taps in Ukraine - file photo
Some major gas producers want to set up a cartel to control prices
Ministers from major gas exporting countries are meeting in Doha, Qatar, amid speculation that they may be planning to set up a cartel.

The informal grouping, called the Gas Exporting Countries Forum, includes Russia, Iran and Kazakhstan.

Some of its leaders have expressed interest in forming a cartel similar to Opec to control production and price.

Gas accounts for about 20% of the fuel used globally for heating, cooking and generating electricity.

The forum is a rather informal grouping with a variable membership but it accounts for something like 70% of known reserves.

Officials in the European Union, which is becoming increasingly dependent on Russian gas, have expressed concern about the possibility of a cartel.

But many analysts are sceptical about whether it could work.

Most gas trade is through regional pipelines so there is not the same kind of global market that a cartel could seek to control as there is for oil, which is transported more by sea.

And there are long-term contracts for supplying gas - up to 30 years - which would also be a barrier to any attempt to cut production in order to push prices higher.

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