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Era of cheap gas over: Putin

MOSCOW: The world’s largest natural-gas producing countries have set up a new club tasked with coordinating export strategies and streamlining relations with consumers.

At a one-day meeting in Moscow on Tuesday, the Gas Exporting Countries Forum (GECF), which until now had no formal membership or management, institutionalised their organisation adopting its Charter and agreeing to elect a Secretary General at the next meeting in Egypt in 2009.

At the meeting, Russian Prime Minister Vladimir Putin warned consumers that the “era of cheap gas” is coming to an end, as new gas fields are in remote areas.

“The expenses necessary for developing fields and transporting gas are rising sharply,” he said. “This means that despite the current problems in finances, despite the economic downturn and a fall in energy prices, the era of cheap energy resources, including cheap gas, is of course coming to an end.”

At the same time, Mr. Putin said the gas industry would be hard hit by the current financial crisis. “We can expect that the crisis will have a more serious effect on the gas industry than the oil business and its recovery will take longer,” he said.

Russian officials denied plans to create a gas equivalent of OPEC to regulate gas export prices. “I emphasise that we have no intention of creating a cartel of producers,” said Russian Energy Minister Sergei Shmatko ahead of the Moscow forum.

The GECF groups 15 countries, including Russia, Iran, Qatar, Venezuela and Algeria, which account for 73 per cent of the world’s gas reserves and 42 per cent of its production.

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