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Consumers fear gas cartel 'monster'



By Upstream staff 

Algeria's energy minister said today that gas producers may set up a committee of experts to consider the idea of forming a "gas Opec" but added that consumers already viewed any such cartel as a "monster".

Iran aired the idea of forming a gas cartel with Russia, Qatar and Algeria in January, but Russia and others have denied they plan to form a group that would influence prices.

Analysts have said that idea is unrealistic as the gas market is dominated by long-term contracts. This gives sellers little scope to use supply controls to influence prices in the manner of Opec.

"I don't know. It is worth thinking about. The only time you are going to have some kind of gas Opec is when you have a very liquid market - lots of liquefied petroleum gas and so on," Algeria's Energy Minister Chakib Khelil told Reuters today.

Gas exporting countries are due to meet in Doha next month.

"We may end forming a group of experts in the area to think about it and to keep thinking about it," said Khelil, when asked about the gathering in the Qatari capital Doha.

He said the idea of a gas Opec first originated from gas consumer countries wanting a scapegoat for their own problems.

"It is not really an idea that came from producers. It is the consumers really that deep in their sub-consciouness want to have a monster. Then they have to accuse it of all ills," he added.

He said the danger of a gas cartel was being used as an argument by proponents of a merger between utility group Suez and Gaz de France , which would create a new French energy giant.

"They want to justify the merger between Suez and Gaz de France because of the supposed threat from Algeria and Russia," he said.

Supporters of the merger say it would create a powerful champion capable of competing on the world stage, but it has been opposed by left-wing politicians. Khelil also said that "Algeria was bothered by European expression of doubt about Algeria's reliability as an energy supplier."


Wednesday, 21 March, 2007, 18:41 GMT  | last updated: Wednesday, 21 March, 2007, 18:41 GMT

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