Gas Exporters Gang Together

The world’s leading gas producers have formalised a collaborative association, the Gas Exporting Countries Forum (GECF), which will have its headquarters here in Doha. Qatar has the third largest reserves of natural gas after Russia and Iran; together with Algeria and Venezuela, these countries are responsible for two-thirds of the world’s gas supply. It’s a roll-call of states (with the notable exception of Qatar) that sends shivers down the spine of many Western leaders, who are already murmuring their discontent at the emergence of an OPEC-style cartel that could wield enormous power.

Attempts by some GECF members to dismiss the notion of a cartel have been undermined by the Venezuelan Energy Minister, Rafael Ramirez, who declared yesterday at the GCEF charter-signing meeting in Moscow that ‘we see in this forum an opportunity to build a solid organisation, which has in its foundation the same principles that gave birth to OPEC.’

The nature of gas contracts means that the natural gas market is quite different from the oil market. But as Russia has shown vis-a-vis Ukraine, for example, controlling the gas supply can be used as an economic or political weapon. And gas-importing countries will hardly have been reassured by Russian Prime Minister Vladimir Putin’s comment yesterday that the ‘era of cheap gas’ is over.