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Will GECF become an emerging gas OPEC?
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With its charter adopted and headquarters located during Tuesday's high-level meeting in Moscow, the Gas Exporting Countries Forum (GECF) is apparently evolving towards a formal organization that Russian leadership has proposed but some others worried.

Founded in Tehran in 2001, the now 15-member GECF groups Russia, Iran, Qatar and other leading gas producers, which account for some 77 percent of the world's gas reserves and 48 percent of production.

The forum's role was strengthened this year as Russia, the world's largest gas producer, intensified its efforts to tap energy globally and revealed its increasing interest on the potential price-control structure similar to the Organization of Petroleum Exporting Countries (OPEC) while denying it will be a gas cartel.

In October, representatives from Russia, Iran and Qatar, which in total account for 56 percent of the world's natural gas reserves, met in Tehran and agreed to establish a "gas troika" for joint exploration and production, raising the curtain over the loose group's further development.

As stipulated in the charter, an executive office and a Doha- based secretariat of the organization will be established, with a secretary general to be elected during the next forum.

The charter also include provisions on information exchange, investment coordination and joint research on market, but put no obligation on price to its members.

While gas producers naming the main goal of the new body as to monitor the market and conduct joint research, they did not rule out coordination on price and Russian Prime Minister Vladimir Putin declared the end of cheap energy despite the current energy price downturn amid the global financial crisis.

"This means ... that despite the current financial difficulties, the era of cheap energy resources, cheap gas, is coming to an end," he said, noting a shift in gas production areas will make energy more costly as major gas producers and consumers are located further apart.

The forum, however, still faces great challenges on its road growing towards a so-called gas OPEC or any other kind of cartel despite of the opposition from major buyers such as Europe and the United States, analysts say.

"Compared to oil, the natural gas market is much more complex. Each major producer has its own consumer base and its own export structure," said Alexei Gromov, deputy general director for science at the Institute for Energy Strategy.

Qatar ships liquefied gas to the United States by tankers and Russia pumps its natural gas via pipelines to Europe. Iran does not have an infrastructure developed enough to ship gas outside of the country, Russian Profile cited the expert as saying.

"All the major players here are working in different segments, and any partnership would limit itself to technological cooperation," he said, suggesting that Moscow put priority on linking Iranian and Central Asian natural gas producers to its gas transport system.

The actual influence of the new forum on the world gas market could only be felt after one decade, said Valery Nesterov, a Moscow-based analyst of the Troika Dialog Company.

(Xinhua News Agency December 25, 2008)

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