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“Gas OPEC” to be Created in Doha Next Month

Mikhail Zygar and Natalia Grib, Kommersant
Kommersant has learned that last week some of the world’s leading natural gas exporters reached a final agreement on the creation of a so-called “gas OPEC.” The consortium of gas-rich countries, which at the moment includes Russia, Iran, Qatar, Venezuela, and Algeria, is due to be formally organized in the Qatari capital of Doha on April 9. The appearance of such a powerful player in the energy arena will undoubtedly meet with an extremely negative reaction from the United States and the European Union.

…Kommersant’s sources in Arab diplomatic circles have confirmed that the forum on April 9 in Doha is considered a convenient moment to announce the creation of a real gas cartel and that the necessary political agreements are already close to being completed.

..One of the most widespread arguments for the unfeasibility of founding such an organization is that all contracts for gas supplies are long-term, making it impossible to tinker with prices at the drop of a hat. All of Gazprom’s contracts with foreign customers, however, stipulate that prices can be reviewed either quarterly or semiannually. In addition, the gas market is functioning at full capacity with a set time lag behind the oil market (gas prices are pegged to those for oil and other petroleum products). In other words, questions of future delivery volumes and the regulation of gas prices could well become subject to agreements between gas-exporting countries within the framework of a gas OPEC.

The main weakness of the emerging cartel lies in the difference of interests among its prospective members. Not all of the leaders of the world’s gas producers are as radical in their outlook as Iran as Venezuela. For example, Qatar is considered an ally of the United States, and according to the Qatari media open anti-Americanism would have serious consequences for the country.
(19 March 2007)

Reckless actions have consequences…

Jerome a Paris, European Tribune
[Comment on previous article] Keeping on alienating people while depending on them for vital resources is not a smart strategy. But our energy policies seem to be summarized by “give it to me or else”, it seems we’re about to discover what’s in that ‘else’.

As we all know by now, there’s little more in that ‘else’ than bluster (or nuclear destruction, but that now seems remote with Russia part of the mooted cartel), and that’s why the Iranians have been happily playing their cat-and mouse games in the past 2 years, Chavez has been mocking and insulting Bush in highly public ways…

These countries (Russia, Algeria, Qatar, Venezuela, Trinidad, even Iran) were not our enemies, they were not even our adversaries, but the Bush administration have made them so via its insane demands on their resources, its refusal to limit in any way our spendthrift ways via smarter energy policies, its bellicose aggressivity towards any sign of independent behavior or disagreement and its policies to shift the blame on those countries for the recent tensions on energy markets.
(19 March 2007)
Also posted at Daily Kos.

Kuwait looking to natural gas, nuclear options

Reuters via Gulf Times
Kuwait is considering an import terminal for liquefied natural gas, gas imports from Iran and Iraq and nuclear power to help it match soaring demand for electricity, its energy minister said yesterday.

Kuwait was in discussions with Royal Dutch Shell and BG Group on a possible LNG import terminal and also for exploration and development of the country’s gas reserves, Sheikh Ali al-Jarrah al-Sabah said. ..

Power demand in the region was rising so quickly that Kuwait and other Gulf Arab states were seriously considering nuclear power plants. “We are in very serious talks (about nuclear power),” he said. “We have to consider alternatives with the cost of fuel and gas.”

Any outages at power plants could cause a repeat of the power outs this summer that hit the country last year, he said.
As consumers crank up air conditioning units in the summer, power demand could reach as much as 10,000MW, equivalent to Kuwait’s power capacity at the moment, he said. The country aims to add another 1500MW of capacity by the summer to meet peak demand, Sheikh Ali added. Kuwait also needed a fourth oil refinery, he said. ..
(15 Mar 2007)