Russia And Iran To Set Up
OPEC-Style Cartel?


TEHRAN (Reuters) -- Iran and Russia could create an export group like the Organization for Petroleum Exporting Countries, based on their command of the world's largest reserves of natural gas, the Iranian supreme leader, Ayatollah Ali Khamenei, was quoted Monday as saying.
The idea of forming a group of producers to control prices of natural gas has been raised before, but officials in gas-producing nations, including Russia, have played down its prospects, partly because the gas market is dominated by long- term contracts.
"Iran and Russia can establish the structure for an organization 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 Sunday in Tehran with the Russian Security Council secretary, Igor Ivanov.
Russia is the No. 1 holder of gas reserves. Iran is No. 2. Iran's reserves are estimated to be at least 940 trillion cubic feet, or 26.6 billion cubic meters, while Russian reserves are estimated at 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 of its gas imports, last week expressed concern that Russia and Algeria, another major supplier of gas to the EU, might create a gas cartel that could hurt EU consumers.
The EU energy commissioner, Andris Piebalgs, called on the two countries to clarify their plans.
Russian officials have repeatedly denied any plan to form a cartel, calling it undesirable and impractical. The Russian natural gas monopoly Gazprom has said that its long-term contracts make such a suggestion implausible.
Despite its large reserves, Iran has been slow to develop exports, partly because U.S. sanctions hinder access by Tehran to the most commonly used technology for turning liquefied natural gas into a product that can be exported by ship.
Algeria has also said talk of forming a group of natural gas producers is premature.
The Algerian energy and mines minister, Chakib Khelil, said this month that the largest producing and exporting countries planned to discuss the stability of natural gas deliveries to international markets when they met in April in Qatar.



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