Oil Plunge Affecting Int'l Gas Market

Oil Plunge Affecting Int'l Gas MarketOil Plunge Affecting Int'l Gas Market

Secretary General of the Gas Exporting Countries Forum (GECF), Mohammad Hossein Adeli, said the recent oil plunge is leaving an impact on the global gas market as well.

Talking to IRNA, he said the low oil prices will sure have their impact on gas prices in the near future. He noted that the sharp drop in oil prices has already lowered the gas prices by 40 percent in Europe and 15 to 20 percent in the Far East.

He also pointed out that unlike oil, which could have almost identical prices in international markets as a global product, gas is regarded as a regional item, which could not be sold at a single price.

The global gas market is comprised of four regional ones namely the US, the Southern Europe, Northern Europe and Latin America, he explained, noting that gas prices are set separately according to the political and economic situation in each region.

Despite the fact that recent developments are pushing these four distinct regions towards adopting a single price, he added, the international gas market is expected to continue with the current method of regional pricing system until 2035.

The GECF is an intergovernmental organization formed by a group of the world's leading natural gas producers including Iran, Russia, Qatar, Algeria, Bolivia, Egypt, Equatorial Guinea, Libya, Nigeria, Trinidad and Tobago, Venezuela, Peru, UAE and Oman.

Adeli had earlier stated that the GECF has set up a working group to monitor market developments on daily, weekly, and monthly bases.

The GECF's main job is to monitor the international gas market, he said. Based on its charter, the organization is a platform for facilitating the exchange of information and experience among member countries.

The GECF member states hold 70 percent of the world’s gas reserves and account for 40 percent of the world’s gas output and 65 percent of compressed natural gas.

Iran, which sits on the world’s largest natural gas reserves, plans to enhance gas production by increasing foreign and domestic investments, especially in its giant South Pars Gas Field. Iran will host the third GECF summit in the fall of 2015.