Can GECF become gas cartel with new export projects?

Baku, Azerbaijan, Sept.26

By Leman Zeynalova – Trend:

It is much more difficult, for the Gas Exporting Countries Forum (GECF) to become a gas cartel, as gas markets to a large extent are still regional in scope despite the advent of liquefied natural gas (LNG), Sijbren de Jong, analyst at The Hague Center for Strategic Studies and expert in energy security told Trend.

He pointed out that most LNG producers on the other hand are not interested in pooling sovereignty.

“Perhaps so, there will be quite a few LNG projects coming online in the near future, primarily from Australia and the US. It is likely that this new supply even outstrips Asian demand, meaning that it will find its way to Europe,” added the expert.

Moreover, the Forum is not even an organization; it is just a forum formed for exchanging views and making policies. The forum's decisions are not binding. Albeit, countries cooperating with the forum can lead to supply of cheaper gas for consumers at the end of the day.

Earlier, head of GECF Gas Market Analysis Department of Mahdjouba Belaifa said that more gas production is expected in the coming years.

Belaifa pointed out that more gas output is forecasted due to: more calls on gas in power generation, new LNG projects, new gas pipelines coming to reinforce the supply on the market, such as TurkStream, Nord Stream 2 and a larger penetration of Azerbaijani gas to Europe thanks to Shah Deniz 2 project that will bring to the market more than 16 billion cubic meters in the short term and more than 30 billion cubic meters by 2030.

This is while natural gas demand is the biggest uncertainty, she added.

"For 2017, while some signals of growth of gas demand are given by the market, lots of uncertainties are shaping its pace to growth," said Belaifa.

The Gas Exporting Countries Forum (GECF) is an international governmental organization which provides the framework for exchanging experience and information among member countries. GECF is a gathering of the world’s leading gas producers and was set up as international governmental organization with the objective to increase the level of coordination and strengthen the collaboration among member countries.

GECF also seeks to build a mechanism for a more meaningful dialogue between gas producers and gas consumers for the sake of stability and security of supply and demand in global natural gas markets.

In accordance with the GECF statute, the organization is aiming to support the sovereign rights of its members over their natural gas resources and their abilities to develop, preserve and use such resources for the benefit of their peoples, through the exchange of experience, views, information and coordination in gas-related matters.

The member countries of the Forum are: Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, United Arab Emirates and Venezuela. Azerbaijan, Iraq, Kazakhstan, the Netherlands, Norway, Oman and Peru have the status of observer members.

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Follow the author on Twitter: @Lyaman_Zeyn

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