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Last Updated: Monday, 9 April 2007, 22:14 GMT 23:14 UK
Russia keen to avoid the C-Word
By Alexander Koliandre
BBC News, Doha, Qatar

Russian Minister of Industry & Energy Victor Khristenko in Doha
Mr Khristenko's Russia is opposed to a cartel.

At the magnificent Ritz hotel, security staff clad in traditional Arab white dress spent the day pushing aside eager journalists.

They had just one question: Would we be seeing a gas price-fixing cartel?

And the answer, voiced by Russia's energy minister Viktor Khristenko was "niet" - or "no".

At least for now.

Qatar, is a country whose enormous prosperity is built on gas exports.

And in the sea-facing hotel in its capital, Doha, intense talks among the energy ministers of gas-producing countries were being held to decide whether a body - similar to OPEC for oil producers - should be introduced.

It would appear that there is no prospect of any such thing.

But instead Russia will be heading a new committee to study "pricing, infrastructure and consumer-related issues".

Although Mr Khristenko says that it is not a move towards a cartel, his colleague from Algeria sees it as step in exactly that direction.

Technically impossible

The gas-exporting countries are divided on the cartel issue.

Iran and Venezuela are all for it as a means of defending producers. Egypt and Qatar, meanwhile, are strictly opposed.

Their positions are understandable - while Iran and Venezuela export virtually no gas, Egypt and Qatar are fighting to win business in the liberalising European gas market.

But all the ministers agree on one thing - such a cartel today would be technically impossible.

The gas market, unlike the oil one, is based on long-term bilateral contracts.

So it does not have either the flexibility, nor the informal global price that OPEC enjoys.

But at least the latter issue is to be studied by the new committee.

Gas taps in Ukraine - file photo
Some major gas producers want a less fragmented gas market

As a member of one delegation said, if anyone wants to build cartel, they should start by studying exactly the reasons the committee was appointed.

The Russian minister wants to calm European fears of a gas cartel.

According to him the fear of the emergence of a gas version of Opec is the product of a sick mind.

He talks of "co-operation" and avoids the other C-word.

The members of the Russian delegation are trying to persuade everyone, that the largest gas exporter in world doesn't need a cartel.

But even a small step towards it might frighten Europe, which is totally dependent on imported gas.


SEE ALSO
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