The world’s largest gas exporters have ruled out launching an Opec-style cartel that would control 70 per cent of the world market. Instead they promised “collaborated efforts” on issues such as pricing.
Energy ministers from the 13 largest gas exporters have met in Doha, Qatar, to discuss proposals from Iran and Venezuela to develop the Gas Exporting Countries Forum into a more formal cartel that would control production and pricing.
There is one practical problem preventing exporters controlling gas in the way the Opec manages the oil market – most gas is distributed using networks of pipelines, with both producers and customers locked into long-term contracts on prices and quantities.
Exporters such as Russia are also concerned that the launch of a gas cartel might encourage European Union member states to increase efforts to switch to alternative sources of power.
Russia, which currently supplies a quarter of the EU’s gas needs, has specifically said it will block the launch of a cartel. It hardly needs one with Gazprom controlling 17 per cent of the world’s gas market.
Alexander Medvedev, Gazprom’s deputy chief executive, said the company intended to more than quadruple its value over the next seven to 10 years, taking its market capitalisation to more than $1 trillion, making it much bigger than Exxon Mobil. The global geo-politics are changing fast.