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Page added on June 28, 2007

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Qatari Doubts Concept of Gas Cartel

Qatar will seek cooperation with Russia in the natural gas industry, but the tiny energy-rich Gulf state sees “difficulties” in forming a gas cartel similar to OPEC, Qatar’s oil minister said Wednesday.

Al-Attiyah said he expected “difficulties” in setting up an OPEC-style gas group, an attempt that alarmed Europe and the United States in April, when 14 natural gas producers and exporters discussed issues facing the global gas market in Doha.
Europe relies heavily on gas imports, particularly from Russia, and was relieved when gas producers and exporters decided in April to form a high-level commission to study gas pricing policies, rather than a cartel.


The commission’s task is to help determine the feasibility of forming an exporters’ group, but energy officials in member states have publicly backed away from statements in favor of a cartel, which for those who depend on imported natural gas for heating, cooking and generating electricity, spells a hike in prices.


Unlike oil, which is traded on an exchange that constantly updates the market price based on supply and demand, most gas is sold under tight contracts that allow buyers to lock in prices for up to 25 years.

Forbes



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