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Gas Exporters Unable to Decide Price Policy

Gas Exporters Unable to Decide Price PolicyGas Exporters Unable to Decide Price Policy

The member-states of the Gas Exporting Countries Forum (GECF) failed to adopt any joint decisions on Tuesday after discussing the gas price situation, Russian Energy Minister Alexander Novak said after the meeting in Doha.

“Of course, we discussed the current situation over prices, but only in the way of monitoring. No decisions on any actions were discussed. We have no such targets and goals,” Novak told Itar Tass.

The participants discussed a study which analyzed the situation on the gas markets, taking into consideration that the gas prices depend on oil prices on many long-term contracts.

Novak said at the 16th ministerial meeting of GECF that research work of the Forum’s secretariat was unsatisfactory and the project for creation of a GECF global gas model was unprepared.

He also found flaws in regulations of the technical and economic council and condemned the forum for the lack of progress in granting Azerbaijan membership.

Headquartered in Doha, Qatar, the Gas Exporting Countries Forum, a gathering of owners of 73% of the global gas reserves who account for 42% of global gas production, was initiated by Iran in 2001.

Members of the forum are the world’s leading natural gas exporting countries: Iran, Algeria, Bolivia, Libya, Russia, Nigeria, Equatorial Guinea, Qatar, Egypt, Trinidad and Tobago, and Venezuela. Kazakhstan and Norway enjoy the observer status.

Omani Diversification

Sinking oil prices are pushing Oman to diversify away from oil, and talks with Iran for gas imports are continuing, the country's oil minister said Tuesday. "We want this gas because we want to diversify away from oil," said oil minister Mohammed al-Rumhy on the sidelines of the forum.

Lower oil prices presented a double-edged sword, according to al-Rumhy. "When the oil price is low, diversifying the economy is the talk of the town," he said.

"Sometimes it is a catalyst for doing projects, like this [referring to the Iranian import scheme]; sometimes, because money is tight, it can slow things down," he elaborated.

From a production perspective, Oman's crude oil costs are higher than other countries in the region, but there are no worries about production becoming unprofitable "unless the oil price goes below $30/barrel," a senior member of the Omani delegation said on the sidelines of the meeting.

Iran and Oman signed an initial agreement in March to build a $1 billion 200-km undersea gas pipeline by 2018, to import 10 billion cubic meters of gas per year from Iran's giant offshore South Pars gas field. At the same time, Oman will continue to export gas in the form of LNG under long term contracts to Asian buyers, which will end around 2025, al-Rumhy said.

 

Financialtribune.com