Gas exporters rule out a cartel, but opt for joint efforts on pricing

The world's largest gas exporters last night ruled out launching an Opec-style cartel that would control 70 per cent of the world market, but promised "collaborated efforts" on issues such as pricing.

Energy ministers from the world's 13 largest exporters of gas met yesterday in Doha, Qatar, to discuss proposals from Iran and Venezuela to develop the Gas Exporting Countries Forum into a more formal cartel that would control production and pricing.

However, Abdullah bin Hamad Al-Attiyah, Qatar's energy minister, ruled out the creation of a cartel. "We are just here to consider our interests," he said following the meeting.

One practical problem preventing exporters controlling gas in the way the Organisation of Petroleum Exporting Countries (Opec) manages the international oil market is that less than a quarter of exports are moved by tankers on the high seas.

Unlike the oil market, where 70 per cent of supplies are shipped, most gas is distributed using networks of pipelines, with both producers and customers locked into long-term contracts on prices and quantities.

Exporters such as Russia are also concerned that the launch of a gas cartel might encourage European Union member states to increase efforts to switch to alternative sources of power.

Russia, which currently supplies a quarter of the EU's gas needs, has specifically said it will block the launch of a cartel, though the country's president, Vladimir Putin, last month described the idea that producers should work more closely to co-ordinate supplies as a "good proposition".

Russia is in a particularly strong position among gas producers because the Moscow-based Gazprom alone controls around 17 per cent of the world's gas.

At the weekend, Alexander Medvedev, Gazprom's deputy chief executive, said the company intended to more than quadruple its value over the next seven to 10 years, taking its market capitalisation to more than $1 trillion (£510bn). This would make it the world's largest company by some margin - Exxon Mobil, currently the world's biggest company, is worth around $440bn.

One of the most crucial tasks for Gazprom is to move into the liquefied natural gas (LNG) market, where it currently has no presence. LNG can be transported around the world using ships, with no need for a network of pipelines.

For this reason, improving the technology used to produce LNG is also at the centre of the Gas Exporting Countries Forum's plans for exerting more control on world markets.

The forum yesterday warned that gas producers faced "great challenges" due to rising construction costs. Exxon Mobil, for example, has already this year cancelled a multi-billion dollar construction project in Qatar amid concerns about high costs.

Kate Dourian, of Platts, the energy analyst, said that the exporters' talks were likely to lead to "a kind of permanent secretariat to look at relations between the gas producers themselves and to exchange technology".