Producers dismiss talks of cartel as all gas

Some major gas producers want a less fragmented gas market and have announced that they would form a high-level committee to discuss gas pricing. However, the group, called the Gas Exporting Countries Forum, which has a variable membership, accounts for virtually 70 per cent of known global gas reserves.

Gas constitutes about 20 per cent of the world''s fuel for heating, cooking and generating power.

The group, currently meeting in Doha, said it had no plans to set up a cartel after Russia''s energy minister Viktor Khristenko dumped suggestions that gas exporters would announce a "gas OPEC", pledging that Russia would never take part in such an organisation. (See: Russia opposes moves to form gas exporters'' cartel)

The world''s largest gas supplier, Russia, will head the committee with other members also including Iran and Kazakhstan, Algeria and Qatar, which would "elaborate a comprehensive plan for enhancing the forum''s performance structure and define a way forward for its future development".

Though a relatively informal grouping some of its members had expressed interest in forming a cartel similar to OPEC to control production and price. Venezuela and Iran have led calls for such an arrangement, saying this would be in the best interests of producers.

But the Russian energy minister Khristenko said he felt that the forum should continue unchanged and keep up its transparent and coordinated position towards consuming countries.

Many analysts are sceptical about whether a gas cartel could work as the bulk of gas trade is through regional pipelines and there is no global market that a cartel could seek to control as there is for oil.

Moreover, Gas contracts also tend to be long-term, covering periods as long as 30 years, which makes it difficult to cut production to raise prices.