Energy ministers gathering in Qatar deny plans to create natural gas cartel

( IHT ) - Energy ministers from Iran and Qatar denied that the world's largest natural gas exporting countries, who held talks here on Monday, intend to band together as a cartel.

Discussions at the 16-member Gas Producing Countries Forum focused on deepening cooperation between gas producing countries with an aim to create a stable world market for the fuel, Iran's Minister of Petroleum Seyed Hamaneh and his Qatari counterpart Abdullah al-Attiyah said.

"I hate the name cartel. We are not a cartel," al-Attiyah told reporters on the sidelines of the meeting's opening ceremony. "We're just here to consider our interests."

Hamaneh added that "there is no discussion in this meeting about a cartel. The cartel is not an issue. We're here to exchange views on technical issues and on the markets."

The Doha meeting - and speculation that leaders here would create a gas cartel - has alarmed leaders in Europe and America. European Union leaders have already discussed potential responses aimed at opposing the emergence of a producer's group that would coordinate output and control prices.

Al-Attiyah said this was unfortunate. Gas importing countries should discuss these issues with the exporter's group, rather than protesting the two-day meeting in Doha and talking about imposing new taxes and regulations.

"The West is reacting negatively," al-Attiyah said. "They should sit with us and discuss this with us before imposing any regulations on us or any new taxes. We should create confidence between producers and consumers and send a positive message and not blame each other."

After a short public opening ceremony, the gas producer's meeting went into closed session. On Tuesday, the gathering is expected to tour Qatar's sprawling natural gas export and liquefaction plants.

The Gas Exporting Countries Forum brings together countries controlling over 70 percent of world gas reserves, including Algeria, Brunei, Indonesia, Iran, Malaysia, Norway, Nigeria, Oman, Qatar, Russia and Turkmenistan.

Many experts say a gas cartel that resembles the Organization of Petroleum Exporting Countries group would be tough to achieve, since most gas is sold under tight contracts that allow buyers to lock in prices for up to 25 years.

Talk of a cartel first arose in January, when Iran's supreme leader Ayatollah Ali Khamenei proposed Iran and Russia create one - and at first the idea seemed to gain favor among producers.

Russian President Vladimir Putin and Qatar's emir agreed to explore the idea. President Abdelaziz Bouteflika of Algeria and President Hugo Chavez of Venezuela are also known to support creation of a cartel.

But it heightened worries in Europe, which relied on Russia for 44 percent of its imported gas.

Sunce then, producer countries have backed away from the idea. Russia's energy minister, Viktor Khristenko, said no documents on creating a gas cartel would be signed at the Doha meeting. On Saturday, Iran's OPEC governor, Hossein Kazempour Ardebili, said producers were only looking for closer cooperation to ensure international markets were securely supplied.

Gas supplies about 23 percent of the world's energy. That makes it the third biggest energy source behind petrol, 36 percent, and coal, 26 percent, according to the Energy Information Administration.

Russia's growing clout as an energy supplier was demonstrated this year when it stopped pumping oil to Belarus, and last year when it shut off gas supplies to Ukraine. In both cases European dependency was painfully exposed.

"The Russians would encourage (a cartel) but they don't want to be the first," said Dalton Garis, an American economist at the Petroleum Institute in Abu Dhabi. "They have a couple of bad marks against them with regard to gas supplies for Europe, and so they don't want to be perceived as moving in this direction."

But Russia would happily jump on board if the other countries led the way, he said.

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