Future of "gas OPEC": greater gas supply, enhanced competition
Baku, Azerbaijan, Nov. 24
By Aygun Badalova - Trend:
The 3rd GECF (Gas Exporting Countries Forum) kicked off yesterday in Tehran, with heads of various states attending the event.
A senior fellow at Nanyang Technological University's S. Rajaratnam School of International Studies, James Dorsey spoke to Trend regarding GECF's perspectives of development and future.
"Gas is very different from oil as it more often than not involves long-term, fixed price contracts," he said. "Having said that, the gas market like the oil market has become more volatile heightening interest in a cartel."
Russia, Iran, Qatar, Algeria, Bolivia, Egypt, Equatorial Guinea, Libya, Nigeria, Trinidad and Tobago, Venezuela, and the United Arab Emirates, are main members of the GECF, which accounts for 42 percent of global gas output, 70 percent of global gas reserve, 40 percent of piped gas transfer, and 65 percent of global trade of Liquefied Natural Gas.
Answering the question whether GECF has chances to become "gas OPEC", which currently is in a rather unstable state, Dorsey reminded that various gas producers have different interests.
"Gulf states with Qatar in the lead are encountering strong competition from other producers like Australia, particularly with regard to the Chinese market," he said.
Among the problems that the GECF can encounter in the future, Dorsey named a greater supply of gas and enhanced competition among the gas-producing countries.
GECF also has a number of observing countries, which include the Netherlands, Iraq, Oman, Peru, Azerbaijan and Norway. Dorsey said the member status in this case is significant for Caspian states, Azerbaijan and Kazakhstan.
"It is obviously significant given the importance of gas to Caspian and Central Asian nations and the competition among them at a time of reduced imports by consumers such as China," he said.