Doha - AFP
Energy ministers of the Gas Exporting Countries Forum met on Sunday to prepare for a first summit of the 12-member group which is to discuss prices and coordination. The GECF, whose members hold just under 70 percent of the world's gas reserves, reviewed "the challenges facing the natural gas industry as well as effective cooperation among GECF members for developing a stable and transparent gas market," said a statement released after the one-day meeting. Qatar's Energy Minister Mohammed bin Saleh al-Sada told a press conference that the members were looking for a fair price for natural gas but denied the forum was aimed at controlling prices. The producers want "a fair price for gas that is linked to an energy commodity, especially crude oil ... Gas prices are not yet in parity with oil," Sada told reporters. "Fair prices are determined by demand and production (supply). It is not the duty of this forum to determine prices," he said. "This forum was established under different circumstances from OPEC," he added referring to the Organisation of Petroleum Exporting Countries. "Its (GECF) objectives are different from that of OPEC." Sunday's meeting welcomed Oman as the newest member of the forum bringing their total to 12. The GECF also comprises Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, and Venezuela, while Kazakhstan, Norway and the Netherlands are observers. Iranian President Mahmoud Ahmadinejad and Algerian leader Abdelaziz Bouteflika are among heads of state who will attend the one-day summit on Tuesday in the Qatari capital, organisers said. According to the GECF, the summit is to discuss the priority of long-term contracts as the basis of security for exporters and consumers of natural gas. It will also seek ways to establish a fair price for gas under a gas-to-oil indexation, with the objective of overcoming the disparity between crude oil and gas prices, the organisers said. The leaders will also review cross investments and technological collaboration between GECF members. Russia is the world's largest gas producer and sits on 30 percent of global reserves, while Qatar is the largest liquefied natural gas (LNG) exporter with a production capacity of 77 millions tonnes a year. Gas prices are determined either in long-term contracts between sellers and buyers, which some exporters index to oil, or on spot markets. World gas demand dropped by 2.1 percent in 2009 due to the global economic recession, but the GECF says it rebounded last year, rising 7.3 percent, mainly due to Japan boosting LNG imports after its March tsunami and nuclear crisis.