Now that the GECF has adopted a charter, it has become an official institution, but the charter does not provide for regulating gas production volumes like OPEC does with oil, and therefore the GECF will not be able to modulate prices like OPEC.
Organized in 2001, the 16-member GECF existed as a discussion club until yesterday. Its members were not restricted by written commitments, and met merely to discuss the urgent problems of the gas industry. Talk of establishing a cartel to modulate global gas prices was common for some time, but while these prices were steadily climbing, gas exporters preferred not to adopt formal commitments. They limited themselves to non-committal consultations once a year. The economic crisis has now compelled them to agree on common actions.
A sensational report came from Tehran in late October. Thee countries - Russia, Iran, and Qatar, which account for more than 60% of the world's natural gas reserves, ostensibly agreed to create a gas OPEC. It transpired that they were merely toying with the idea of the Big Three, and that the GECF charter was expected to be signed in Moscow in November.
Now the charter has been signed but its text has yet to be published. Energy Minister Sergei Shmatko said that the charter does not say a word about regulating gas production. It deals with rules for supplying gas consumers, cooperative work on liquefied natural gas (LNG), introduction of new technologies in the gas industry, and exchange of information on investment projects.
Formation of the Big Three was not removed from the agenda, although it hardly seems likely today because of strong contradictions between the three countries. Iran, for example, wants the cartel to be modeled after OPEC that regulates production to push up prices. This is a very difficult task because, as distinct from oil, there is no global gas market. Also, Tehran's position runs counter to Moscow's.
Russia would like the would-be cartel to engage in joint projects to build gas pipelines. This is only natural since Gazprom has contracts to supply gas to Europe for the next 30 years. Russia is looking for ways to transport Central Asian gas to Europe via Russia instead of the Caspian Sea bottom or via Iran.
The third potential member of the gas OPEC, Qatar, has its own gas projects, all of which focus on supplying Europe with LNG. If it limits these exports to raise prices, it will be quickly replaced as a supplier by rivals.
The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.
The fact of registration and authorization of users on Sputnik websites via users’ account or accounts on social networks indicates acceptance of these rules.
Users are obliged abide by national and international laws. Users are obliged to speak respectfully to the other participants in the discussion, readers and individuals referenced in the posts.
The websites’ administration has the right to delete comments made in languages other than the language of the majority of the websites’ content.
In all language versions of the sputniknews.com websites any comments posted can be edited.
A user comment will be deleted if it:
The administration has the right to block a user’s access to the page or delete a user’s account without notice if the user is in violation of these rules or if behavior indicating said violation is detected.
Users can initiate the recovery of their account / unlock access by contacting the moderators at firstname.lastname@example.org
The letter must contain:
If the moderators deem it possible to restore the account / unlock access, it will be done.
In the case of repeated violations of the rules above resulting in a second block of a user’s account, access cannot be restored.
To contact the team of moderators, write to email@example.com