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Last Updated:[10-12-2009 07:20:27 EDT] Zoom in Zoom out Back to Tradenews

Russia to Lead Gas Exporters – Reinforces its Position

tradenews Leonid Bokhanovsky, a board member and the first vice president of the leading engineering-construction company Stroitransgaz of Russia has been chosen as the General Secretary of the Gas Exporting Countries Forum (GECF). The GECF leadership in the hands of Russia means that it will have more control over natural gas producers as well as monopolistic power over many gas consumer nations.

Russia is often called as an energy blackmailer due to its muscle-flexing prowess during the winter season of Europe by snapping supplies to the region. Though Russia’s share of total EU gas imports is just above 40 percent as compared to 80 percent in the 1980s, the emergence of the new formation is likely to reduce competition from the group members to the European markets for it.

The GECF comprises of Algeria, Bolivia, Brunei, Egypt, Guinea, Indonesia, Iran, Libya, Malaysia, Nigeria, Venezuela, Qatar, Trinidad and Tobago and Russia. While Norway and Kazakhstan have observer status, the UAE and the Netherlands were attendees to the formation meet held in Qatar.

Though Iran, Egypt, Nigeria and Trinidad and Tobago put forward nominations for the renewable two-year post of General Secretary, Russia’s prominence in the energy domain helped it to see its candidate get elected. The GECF will be funded through equal share from its group members, and has set aside a budget of about $6m for the first year 2010.

The primary aim of the gas group would be to ensure stable price for gas by preventing oversupplies to the regional markets. Sergei Pravosudov, director of the National Energy Institute, a think tank said that Russia, the largest gas exporter plans to capture a greater share of the market of the US and Asia through its state-owned oil firm, Gasprom. He also stated the goal of the forum would be to divide the markets to each member, and eventually avoid price friction among forum-member producers.

For instance, Iran would be asked to direct its future supplies to India by almost exiting from the European markets. As to balance Iran’s supplies, Gasprom has shown interest to take part in the ambitious pipeline gas project between Iran and India.

Bokhanovsky said the forum would develop its own research team to facilitate new technology for gas exploration, production and transportation. He added that it would also gauge the supply and demand time to time, and gather information regarding the demand of gas and other energy sources to push the growth of global gas consumption.

By Jose Roy

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