English
Arabic
Chinese (Simplified)
Gujarati
Hindi
Marathi
Persian
Russia is eyeing the possibility of launching a ‘Gas OPEC’, Vedomosti reports, noting that Russian Deputy Minister of Energy Anatoly Yankovsky mentioned this prospect in early June, while Minister of Energy Alexander Novak stated last week that the creation of a coordinating body that would regulate the volume of gas sales and prices “has been under active discussion lately.” The energy chief stressed that the main reason for chaos on the global gas market is the lack of a regulator.
Nikita Maslennikov, a leading expert from the Institute of Contemporary Development, told Vedomosti that the situation on the global gas market is even worse than what is currently happening with oil. The drop in prices is sharper, he pointed out, adding that destabilization and a lack of balance have been noted in Europe, Russia and the Asia-Pacific. Fierce competition between pipeline gas and LNG is also a serious factor affecting the market. The US, Qatar and Australia export cheap LNG to Europe and Asia, causing a drop in demand for pipeline gas (mainly coming from Russia) and concurrently, a drop in its prices.
“The global gas industry has been facing the same issues as the oil industry, like excess supply, increased competition, and a drop in prices. This is why the market needs a regulator to avoid chaotic prices. This is obvious. Another question is whether it will appear,” head of the AMarkets analytical department Artyom Deyev told Vedomosti.
Creating a gas regulator will be much more difficult than establishing OPEC, said Dmitry Aleksandrov who heads Univer’s analytical research department. He told Vedomosti that gas producers are much more divided than members of OPEC.
For his part, Mamdouh Salama, a professor of economics and energy at the ESCP Business School, is confident that strife between gas producers will linger for a long time. However, they will realize at the end that only cooperation can lead to stable prices both for LNG and pipeline gas, the expert pointed out, adding that this will benefit everyone. So, it seems that Russia has been the first to realize this.