Russia, Iran, Qatar Agree on Gas OPEC

[Dover]

Qatar, Iran and Russia have agreed on the conditions for the creation of a “gas OPEC,” announced Iranian Oil Minister Gholamhossein Nozari, after negotiations with the Qatari energy minister and Gazprom head Alexey Miller. “We made important decisions during the meeting. There is a demand to creat a ‘gaz OPEC’ and now an agreement has been reached on its creation,” Nozari said.

Iran first proposed the creation of a “gas OPEC.” It has the second largest reserves of natural gas in the world. Russia supported Teheran’s proposal. It has the largest reserves of natural gas and is the largest exporter of the fuel. Venezuela also expressed interest in creating a cartel, as did various Arab League countries, such as Bahrain, Oman, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates. Russia, Iran, Qatar, Venezuela, Nigeria and Algeria have already met several times as an informal club.

The United States and European Union have opposed the creation of a “gas OPEC.” They say a cartel would threaten the energy security of the whole world and lead to price manipulation.

http://212.248.33.60/p-13421/r_500/_atural_gas_OPEC/

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Outlook for Gas OPEC

The idea of creating a “gas OPEC” is not a new one. Global politics has been haunted by it regularly since 2001. However, high-profile statements have boiled down to nothing so far.
“Collusion” between gas producing countries is prevented by a simple scheme: natural gas usually crosses borders through pipelines, which carry it to specific markets dominated by long-term contracts based on well-thought-out pricing formulas. Liquefied natural gas (LNG), which is transported in tankers and could be viewed as oil equivalent, so far plays only an insignificant role in pricing.

Gas producers will only be able to manipulate LNG prices when it begins to account for 25%-30% of the global gas market. That would be enough to influence prices in importer countries and compete with long-term pipeline contracts. Moreover, in that case gas suppliers could also try to peg natural gas prices to LNG instead of fuel oil, coal and other energy resources, as is the case now.

cont'd

http://212.248.33.60/p1045240/r_520/What_to_expect_from_the_new_initiative_of_Gazprom/


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Oct. 25, 2008

Baku plays the waiting game

Sitting in the coffee shops of downtown Baku, it feels a long way from the US presidential election.

Here, there is a strange blend of Russian and Persian culture which makes sense, given that Azerbaijan is geographically sandwiched in between Iran and Russia.

Its larger neighbours have considerable influence on this country of about 8.5 million people, but the relationship that really matters to the leadership of Azerbaijan right now is with the United States.

This country is about to become very, very rich.

The Azeri government boasts that between now and 2013, when its Absheron peninsula reaches its peak oil production period, it will earn an estimated $100bn, based on conservative estimates.

And it is for this reason that Azerbaijan has become a close friend of the West.

Balancing act

The steady, but heavy-handed rule of Ilham Aliyev, the president of Azerbaijan, provides a degree of stability in this region that the US is keen to sustain...>

http://english.aljazeera.net/news/europe/2008/10/2008102421423814585.html

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