Gas exporters seek cooperation to raise supply and boost prices

Robert Tuttle, Anthony Dipaola And Wael Mahdi (Bloomberg)
Filed on November 16, 2011

DOHA - The world’s largest natural-gas exporters aim to cooperate on developing projects for production and sale of the fuel to boost supply and raise prices.

Russia and Qatar, who together hold one third of the world’s gas reserves, may cooperate in financing, building and marketing from a liquefied natural gas production project in Russia’s Arctic region, that country’s Energy Minister Sergei Shmatko said on Tuesday in Doha, where the Gas Exporting Countries Forum, or GECF, met.

It would be the first gas production venture between the two countries.

Producers need to find ways of narrowing the price gap between gas and crude, the Amir of Qatar, Hamad bin Khalifa Al Thani, said.

Natural-gas prices are too low and unfair to producers, Al Thani and energy ministers from Iran and Egypt said in speeches on Tuesday. The nations failed to agree whether OPEC-style limits on output would help boost prices.

Exporters need to attract more investment partners to help pay for rising production costs, Egypt’s Petroleum Minister Abdalla Ghorab said. Egypt has sought to negotiate price increases for customers of its gas, including Israel, Jordan and European buyers.

Iran’s Oil Minister Rostam Qasemi called for the GECF to develop “a comprehensive market management plan” that would allow them to react to demand fluctuations by adjusting supply.

The exporters’ group doesn’t want to control prices through production limits, Qatar’s Al Thani said. Protecting the interests of exporting countries doesn’t mean that the interests of consuming nations won’t be considered, he said. Libya will make new efforts in coming years to find crude oil and gas and plans to develop new downstream projects along its coast, National Transitional Council Chairman Mustafa Abdel Jalil said. Jalil assured the country’s partners that their energy projects there will be protected.

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