A group of major natural-gas producers and exporters laid the groundwork Monday for what could turn out to be the formation of another world energy cartel, The Wall Street Journal (WSJ) reported.

On the first day of their meeting in Doha, Qatar, the 14 members of the Gas Exporting Countries Forum decided to set up a commission to assess the feasibility of establishing an exporters' group mirroring the Organization of Petroleum Exporting Countries (OPEC), the newspaper said. "In the long run, yes, we are moving towards a gas OPEC," Algeria Oil Minister Chakib Khelil said. But he signaled it would take a "long time" before gas markets were liquid enough to form such a group.

The proposed commission, which would be made up of the deputy energy ministers from major gas-producing nations, will report its findings in time for the group's next meeting in Russia next year. Russia, the world's largest gas exporter, is expected to take a lead role in the study of gas price formation, the newspaper said.

The forum was founded in 2001 to unite the countries that together control more than 70% of the world's natural gas reserves. Some of the major gas-producing countries that are members of the forum include Russia, Iran, Venezuela, Qatar, Algeria, Malaysia, Norway, Nigeria, Oman, Turkmenistan, Brunei and Indonesia..

The United States opposes the creation of a gas cartel. In a letter to Secretary of State Condoleeza Rice last week, Rep. Ileana Ros-Lehtinen called on the major natural gas-consuming countries of the United States, Europe and Asia to work cooperatively to block leading gas exporters from creating an cartel-like organization for gas (see Daily GPI, April 3). "The creation of this cartel would pose a major and long-term threat to the world's energy supply," said Ros-Lehtinen, a member of the House Foreign Affairs Committee.

While the U.S. is largely self-sufficient in natural gas, its imports of liquefied natural gas (LNG) are projected to increase rapidly over the next few years, according to the House committee. Europe already is heavily reliant on Russia for almost of its gas needs, and will become increasingly vulnerable over the next decade. Japan, South Korea and other U.S. allies are big consumers of imported gas, and countries such as China and India are projected to rapidly increase their consumption in future years.

Energy experts doubt that a cartel-like organization for gas, even if formed, would have the same clout as OPEC. Steve Thumb, principal of Arlington, VA-based Energy Ventures, believes creation of a gas cartel is very debatable. "I don't think the market's there for them to control," he told NGI. Unlike with oil, most LNG is sold under long-term contracts, and "very little" is sold in the spot market, Thumb said.

In recent testimony before a House committee, Daniel Yergin of Cambridge Energy Research Associates said establishment of a gas cartel-like organization was inevitable, but he did not believe producing countries could control the international gas market in the same way OPEC has influenced global oil prices and supplies.

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