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22.04.2011

Opec-type Gas Group "Formation Unlikely"

The formation of an Opec-style group for natural gas exporters is unlikely in the immediate future in view of the long-term nature of contracts between exporters and importers of the clean energy, a highly placed official of International Gas Union (IGU) told Times of Oman here yesterday.

Earlier, natural gas-rich Russia and Qatar had mooted a proposal to explore creation of a natural gas group to represent the interests of producer countries to influence the global market.

"We do not think it is the right way to go because natural gas industry is different from oil, where you have the Opec. We need long-term relationship and partnership between buyers and sellers. So, cartelisation is not a good idea. At least, it is not happening currently," said Torstein Indrebo, secretary-general of International Gas Union -- the apex body of natural gas producers and consumers that has 109 members across the world.

Oman LNG is the only member from the Sultanate in the international body.

Compared to spot oil sales, gas is sold on contracts arranged on much longer terms, as long as 25 years, and a group would have little influence on such arrangements.

He said there were talks about formation of 'Gaspec,' resembling the Organisation of Petroleum Exporting Countries (Opec). This was mooted by the Gas Exporting Countries' Forum, which has 14 members. The member countries include Qatar, Russia, Egypt, Algeria, Nigeria, Bolivia and Venezuela.

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