World's gas rich nations expected to form cartel
Experts feel that this lobby will respond to competition from regional markets and growing trade of LNG and not regulate prices.business Updated: Apr 07, 2007 13:14 IST
The world's largest natural gas producers are expected to announce the formation of a cartel at Doha, Qatar next week but experts in the United States expect no "significant impact" on prices or production of natural gas, says a media report.
Fourteen gas-rich nations are attending the meeting of the Gas Exporting Countries Forum in Doha, says Forbes.
It said the natural gas exporters appear to be seeking only cooperation amongst themselves for now. But as was the case with OPEC when it formed in 1960, it is unclear exactly what "cooperation" will mean a decade or so down the road, when global energy markets surely would have changed.
No one is certain what the new organisation will try to achieve, but experts in America say it will not be able to set prices like the Organisation of Petroleum Exporting Countries (OPEC).
Among other reasons given by the experts are that the global market for natural gas is too fractured, there are too many substitutes for the fuel and two of the "loudest voices" in favour of the cartel, Iran and Venezuela, have little heft in the market. Iran is a net importer of natural gas and Venezuela is likely to be one soon, too.
Instead of forming a group to manipulate prices, Forbes says natural gas producers appear to be responding to the growing trade in liquefied natural gas or LNG (as opposed to gas that travels along a network of pipelines), and increasing competition in regional markets.