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Russia to consider idea of international 'gas OPEC'

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Russia will consider Iran's proposal to set up an organization similar to OPEC to ensure reliable and uninterrupted gas deliveries to consumers, President Vladimir Putin said Thursday.
MOSCOW, February 1 (RIA Novosti) - Russia will consider Iran's proposal to set up an organization similar to OPEC to ensure reliable and uninterrupted gas deliveries to consumers, President Vladimir Putin said Thursday.

Iranian Supreme Leader Ali Khamenei spoke Sunday in favor of setting up "a cooperation organization in the gas sector similar to OPEC."

"A 'gas OPEC' is an interesting idea. We will think about it," Putin told a Kremlin news conference.

"At the first stage, we agree with Iranian experts, partners and some other countries that produce and supply hydrocarbons to world markets in large volumes. We are already trying to coordinate our actions to develop markets and intend to do so in the future," Putin said, though he added that such an organization must not be a cartel.

Interestingly, the Russian Economic Development and Trade Ministry said Monday it saw no economic justification for establishing an international natural gas cartel.

A spokesman for the ministry said: "I do not understand why Russia would need to create a gas cartel - I do not see any sense in it. The more so as Iran is now coming under serious external pressure."

The official said Russia should be guided by demand alone, and should not coordinate its actions with anyone.

"Why should we undertake commitments to synchronize our actions, why force ourselves into regulatory frameworks which could boil down to setting quotas?" the official said.

He also said Khamenei's proposal was more political than economic.

The official said the Organization of Petroleum Exporting Countries was established as a means of putting pressure on the U.S., and of regulating oil supplies to that county.

Industry and Energy Minister Viktor Khristenko also said earlier there were no objective grounds for a cartel agreement in the gas sector.

"A gas OPEC? I can't make such forecasts. The more so as I am not the initiator of such documents, and I don't believe we should follow a cartel agreement path," Khristenko said last week during a visit to Algeria.

OPEC was founded in 1960 by major oil suppliers Venezuela, Iraq, Iran, Kuwait and Saudi Arabia. Today the organization also includes Algeria, Angola, Indonesia, Libya, Nigeria, Qatar and the United Arab Emirates.

OPEC's main aim is to coordinate the oil policies of its member states to protect their interests and ensure stable prices on world oil markets. Russia is the largest oil-producing nation outside the cartel and has the world's largest gas reserves.

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