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No gas cartel deal at Doha - Russian minister

Russia's energy minister said no gas cartel agreement should be expected at a forum of gas exporters in Doha Monday, and called for cooperation between all energy market participants.
MOSCOW, April 6 (RIA Novosti) -- Russia's energy minister said no gas cartel agreement should be expected at a forum of gas exporters in Doha Monday, and called for cooperation between all energy market participants.

In late January, Iran proposed establishing an alliance in the gas sector similar to OPEC. President Vladimir Putin supported the idea, but other Russian officials and lawmakers were rather skeptical.

"Even a memorandum has to be drafted first, before being signed," Viktor Khristenko, who will represent Russia at the forum in the Qatari capital April 9, told a RIA Novosti news conference.

The forum in Doha will gather representatives of Iran, Qatar, Russia, Venezuela and Algeria, which altogether control more than 70% of global natural gas reserves.

Ahead of the forum, some consumer countries have expressed concerns that gas producers might form a conspiracy to set gas prices to their own advantage.

But Khristenko said Russia, which holds more than 25% of the world's gas reserves, and the other gas exporters had no intention of uniting against importers. "We have not and never will pursue a goal of forming friendships against somebody," he said, dismissing importers' concerns as "heightened".

Khristenko said the forum in Doha could produce a memorandum on global energy security - one of the priorities of Russia's 2006 presidency in the Group of Eight, and called for using the forum to establish an effective dialogue between suppliers, consumers, and transit nations in a bid to avoid risks in energy cooperation.

Russia's reputation as a reliable energy supplier was badly damaged by energy rows with Ukraine and Belarus in January 2006 and 2007, which led to a brief suspension in gas and oil supplies to Europe.

The Russian official moved to allay fears about stability and sufficiency of gas supplies, saying Russia "is a pure exporter and its resources exceed its domestic demand."

"We have a colossal potential for energy efficiency, and it can be compared to at least two thirds of the volume of gas we provide to Europe today," he said.

The minister said Russia was developing a dialogue with all players on the energy market, including consumers such as the United States. He added Russia and Germany, which are jointly building a direct gas pipeline across the Baltic Sea, would organize a bilateral energy forum next week.


Khristenko said gas market globalization was possible if the liquefied natural gas (LNG), which presently has a 25-27% market share, occupied the dominating position as a mobile and liquid product.

"Globalization will only happen when LNG gains the leading position on the market," he said, adding that at the moment global gas markets were disintegrated and based their prices on the oil market.

Corporate agreements

The minister said the forum in Doha was unlikely to produce any corporate agreements.

"The forum will be attended by representatives from major corporations, including Gazprom, but as far as I know no special corporate decisions have been planned," he said but added the issue would be discussed.

Domestic gas market

Khristenko tried to calm concerns about the growing influence of Russian state energy giant Gazprom [RTS: GAZP] on the domestic energy market by saying independent producers would control 55% of the country's gas market by 2015.

"Our estimates say companies, which have no links to Gazprom, will provide about 55% of gas to the energy and industry sectors," Khristenko said. Independent gas producers in Russia are Novatek [RTS: NVTK] and Itera.

He said trade on the Russian gas exchange that opened November 22 following President Vladimir Putin's instructions, could be trebled to 30 billion within two or three years.

"We [the ministry] have said that raising trade from 10 to 30 billion cu m within two-three years is realistic," Khristenko said.

He said independent producers and Gazprom would sell 5 billion cu m of gas for unregulated prices on the floor in 2007 as part of the so-called 5+5 experiment.

The official also promised that domestic gas prices in Russia would be 40-42% lower than in Europe by 2011 when prices will be released from state control.

"The domestic price will be lower than in any European or Asian country anyway because gas is produced here," he said, adding that there would be no transportation or tax expenses.

The minister strongly opposed the idea of legally regulating the development of the energy balance like the federal budget.

"The attempt to introduce legal control over the energy balance development will mean that all risks - those of suppliers and consumers - will have to be covered by the state, which means citizens, pensioners, teachers and doctors," he said.

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