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World's top gas suppliers hold first summit

16 november 2011, 14:40
A general view shows the 13th Ministerial of the Gas Exporting Countries Forum in Doha. ©AFP
A general view shows the 13th Ministerial of the Gas Exporting Countries Forum in Doha. ©AFP
Leaders of the world's largest gas exporters, including Iran's president, are to hold their first summit on Tuesday in the Qatari capital to discuss pricing and supplies, AFP reports.

The summit comes two days after a ministerial meeting of the 12-nation Gas Exporting Countries Forum (GECF), whose members hold just under 70 percent of global natural gas reserves.

Iranian President Mahmoud Ahmadinejad, Algerian leader Abdelaziz Bouteflika and the leader of Libya's National Transitional Council, Mustafa Abdul Jalil, are among heads of state due to attend the one-day summit.

According to the GECF, the summit is to discuss the "priority of long-term contracts as the basis of security for exporters and consumers of natural gas."

It will also seek ways to establish a fair price for gas under a gas-to-oil indexation, with the aim of overcoming the disparity between crude oil and gas prices, organisers said.

The leaders will also review cross investments and technological collaboration between GECF members.

Besides Oman which was admitted Sunday, the GECF also comprises Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, and Venezuela.

Kazakhstan, Norway and the Netherlands are observers.

Russia is the world's largest gas producer and sits on 30 percent of global reserves, while Qatar is the largest liquefied natural gas (LNG) exporter with a production capacity of 77 millions tonnes a year.

GECF has been working for a fair price for gas which its leaders say is the fastest growing energy source, but they deny it aims to control prices or become a cartel like OPEC.

The producers want "a fair price for gas that is linked to an energy commodity, especially crude oil ... Gas prices are not yet in parity with oil," Qatar's Energy Minister Mohammed bin Saleh al-Sada told reporters on Sunday.

"Fair prices are determined by demand and production (supply). It is not the duty of this forum to determine prices," he said.

"The summit wants to send a message (to the world) about reliable gas supplies," Sada said.

Gas prices are currently determined either in long-term contracts between sellers and buyers, which some exporters index to oil, or on spot markets.

World gas demand dipped in the wake of the global financial crisis but the GECF says it rebounded last year, rising 7.3 percent, mainly due to Japan boosting LNG imports after its March tsunami and nuclear crisis.

The International Energy Agency estimated last month that around $10 trillion of investments would be needed in the gas industry until 2035, or about $400 billion a year.

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