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Khamenei suggests OPEC style gas group with Russia
Russian Security Council Secretary, Igor Ivanov, with Iran's Supreme Leader Ayatollah Ali Khamenei
Alarab Online
Teheran
Petroleumworld.com 01 29 06Iran and Russia could start up a gas exporting group like OPEC based on their command of the world's largest natural gas reserves, Iranian Supreme Leader Ayatollah Ali Khamenei was on Monday quoted as saying.
Forming a grouping of producers to control gas prices has been mooted in the past but officials in gas producers, including Russia, have tended to play down its prospects, partly because the gas market is dominated by long-term contracts.
"Iran and Russia can establish the structure for an organisation of gas cooperation like OPEC as half of the world's gas reserves are in Russia and Iran," Khamenei was quoted by state television as saying.
He was commenting during talks on Sunday in Tehran with Russian Security Council Secretary Igor Ivanov.
Russia and Iran are the world's No. 1 and No. 2 holders of gas reserves respectively. Iran's reserves are estimated at 940 trillion cubic feet or more and Russia's is estimated to hold between 1,680 trillion to 2,360 trillion cubic feet.
World reserves are estimated by industry experts at between 6,100 trillion and 7,000 trillion cubic feet.
The European Union, which relies on Russia for about a quarter its gas imports, last week expressed concern that Russia and Algeria, another major supplier of gas to the EU may create a gas cartel that could hurt EU consumers.
EU Energy Commissioner Andris Piebalgs called on the two countries to clarify their cooperation plans.
Russian officials have repeatedly denied they have any plan to form a cartel, saying it is undesirable and impractical, while Russian gas monopoloy Gazprom says its long-term contracts make such a suggestion implausible.
Despite its large gas reserves, Iran has been slow to develop exports, partly because U.S. sanctions hinder Tehran's access to the most commonly used technology for making liquefied natural gas (LNG), a product which can be exported by ship.
Algeria has also said talk of forming a group of gas producers, like the Organisation of the Petroleum Exporting Countries, is premature.
Algerian Energy and Mines Minister Chakib Khelil said earlier this month that the largest gas producing and exporting countries planned to discuss the stability of gas deliveries to international markets in April in Qatar.
Alarab Online 29 01 07
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