Gas Producers to Form Pricing Group

Russian Energy Minister Viktor Khristenko said yesterday at the Gas Producing Countries Forum in Qatar that the world's largest natural gas producers have agreed to create a group to study gas pricing policy -- a move widely viewed as a precursor to the formation of an OPEC-like cartel. The group, which will study pricing, infrastructure and the relationship between producers and consumers, will make its first report in 2008 at the next Forum. Gas-dependent Europe has warned that it will pursue alternative energy sources if a gas cartel comes into being, prompting reassurances from the ministers. "I hate the word 'cartel,'" said Qatari Energy Minister Abdullah al-Attiyah. "We should work towards greater cooperation to stabilize the market, to give confidence to our consumers." Khristenko: "We do not, and will not, set ourselves the goal of ganging up on anybody." The ministers agree that an OPEC-like body will not be practical in any case until gas becomes a globally traded commodity. The advent of liquefied natural gas, of which Qatar and Indonesia are the world's leading exporters, is believed by analysts to be a step toward a global gas market.

Sources: Bloomberg, Boston Herald, Wall Street Journal, Reuters
Commentary: Gazprom: Rich in Resources, Weak in Capital • Think You Want A Piece of High Flying Gazprom? Think Again • ExxonMobil Shelves Qatar Gas-to-Liquid Project in Favor of Natural Gas
Stocks/ETFs to watch: OAO Gazprom [ADR] (OGZPY.PK), Energy Select Sector SPDR ETF (XLE), PowerShares Dynamic Energy & Exploration (PXE)

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.