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Last Updated: Monday, 9 April 2007, 22:17 GMT 23:17 UK
Gas producers dismiss cartel talk
Workers fixing a gas pipeline
Gas prices have fallen from record levels as supply problems eased
Major gas exporting countries have said they will form a high-level committee to discuss pricing.

However, meeting in the Qatari capital Doha, the informal grouping, called the Gas Exporting Countries Forum, said it had no plans to set up a cartel.

Russia, will head the committee with other members also including Iran and Kazakhstan, Algeria and Qatar.

Gas accounts for about 20% of the fuel used globally for heating, cooking and generating electricity.

In a statement, the forum said the committee would "elaborate a comprehensive plan for enhancing the forum's performance structure and define a way forward for its future development".

Played down

Having [a cartel] for the gas exporting countries is beneficial to all sides
Kazem Vaziri Hamaneh
Iranian Oil Minister

The forum is a relatively informal grouping with a variable membership but it accounts for something like 70% of known reserves.

Some of its leaders had expressed interest in forming a cartel similar to Opec to control production and price.

But the Russian energy minister Viktor Khristenko said he felt that the forum should remain unchanged.

"It should continue existing as such and should keep up its transparent and coordinated position towards consuming countries," the minister said.

He added that the forum would launch a joint study to examine prices, with Russia, the world's largest gas supplier, organising the process.

Mr Khristenko had earlier played down talk that the group was looking to set up a cartel similar to Opec.

Scepticism

Venezuela and Iran have led calls for such a scheme, saying this would be in the best interests of producers.

"Having such an organisation for the gas exporting countries is beneficial to all sides," Iranian Oil Minister Kazem Vaziri Hamaneh said, but added the process would be a lengthy one.

Mr Hamaneh dismissed opposition from the US and other Western nations.

Many analysts are sceptical about whether a gas cartel could work.

Most gas trade is through regional pipelines so there is not the same kind of global market that a cartel could seek to control as there is for oil.

Gas contracts also tend to be long-term, covering periods as long as 30 years, which makes it difficult to cut production to raise prices.




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