Gas exporters' forum concludes second meeting in Algiers: Report

The second ministerial meeting of the Gas Exporting Countries' Forum, which was held in Algiers February 1-3, took no decision on output or pricing, but set up discussion and study groups to examine such issues as the European Union gas directive, technology and supply contacts.

According to Platts the issue of delinking gas pricing from oil did not arise as an official topic on the agenda, nor did the question of moving from long-term take-or-pay contracts towards short-term trading.

However, the question of changing the link between gas and oil prices was not far from the minds of several ministers and senior officials.

Indeed, Egyptian oil minister Sameh Fahmy proposed that "delinking gas prices from crude oil should be considered and carefully studied."

Gas exporting countries, he said, "can achieve mutually acceptable gas pricing formulas...that will encourage growth and development of the gas industry."

Fahmy also said he believed that "both buyers and sellers will push for...shorter-term agreements with more flexibility, and...pricing modifications that consider a broader basket other than oil or petroleum products and create a more mature and liberalized gas market."

On the question of liberalization, Algerian president Abdelaziz Bouteflika criticized the EU gas directive for being concerned with supply security at the expense of producing countries.

He told the forum, whose participants hold more than 60% of the world's gas reserves, that the directive, which was devised without any producer country involvement, would "heavily handicap" gas investment.

Bouteflika called for the continuation of long-term take-or-pay contracts.

He also urged that new forms of "cross- or direct partnership" between producing countries and consumers be established.

The countries which attended the forum were: Algeria, Bolivia, Brunei, Egypt, Indonesia, Iran, Libya, Malaysia, Nigeria, Oman, Qatar, Russia, Venezuela. The next meeting of the forum will take place in Doha, Qatar, next year.

Before then, two experts' meeting will be held in April and November 2002. The April session will, among other things, discuss the setting up of a round-table to be hosted by Algeria and Russia, to consider exports to Europe and to which the European Commission and EU member states will be invited. (*)