Gas exporters set up forum in Moscow

Energy ministers from fourteen gas-rich countries signed an agreement in Moscow on Tuesday to set up the Gas Exporting Countries Forum headquartered in Doha, Qatar.

Russia'sPrimeMinisterVladimirPutin(C)speaks
during theGasExportingCountriesForuminMoscow.
(AFP/NataliaKolesnikova)

The Gas Exporting Countries Forum will have 16 members. Among them will be Algeria, Iran, Qatar, Venezuela, Indonesia and Nigeria.

Russia's Energy minister says the organization will comply with all norms of international law.

He reiterated that Russia does not intend to influence gas prices by curbing production.

Sergei Shmatko, Russian Energy Minister, said, "We have agreed to cooperate on a very wide range of matters. These are exchange of information on the present forecasts for the market, exchange of information on the realization of the current investment programmes, our relationship with major gas consuming countries, the questions of marketing and technologies."

Russian Prime Minister Vladimir Putin says the price of natural gas is set to rise as the world financial crisis and rising costs hurt production.

He predicts the crisis will hit the gas industry harder because its market is more sluggish.

Vladimir Putin, Russian Prime Minister, said, "The costs of development of the gas industry are growing sharply. This means that despite the problems with world finances, despite the economic slowdown, even despite the current drop in energy prices, the era of cheap energy resources including cheap gas is certainly over."

Analysts expect prices to drop in the short term as lower global demand hurts prices.

In the longer-term, they fear the financial downturn may starve the gas industry of the funds it needs to keep production up.

Unlike oil, most gas is sold under tight contracts that allow buyers to lock in prices for years.

As a result, a cartel would likely have little influence.