Qatari Emir Sheikh Hamad Bin Khalifa al-Thani opened the first ever summit of major gas exporting nations with a call for serious action to achieve a fair price for gas, saying it was "illogical" to have increasing disparities between oil and gas prices.
"Gas exporters should not give up their demand for a fair price of gas that is equivalent to oil and to use all available means to achieve this end," he told heads of state and oil ministers of the 12-member Gas Exporting Countries Forum.
"But we are not talking about controlling production but other means such as upgrading and supporting the technologies that will help to expand the opportunity to use gas and advocating the use of gas at international and regional forums, influencing the laws that support gas exploitation, enacting laws that take into account the environmental advantages of gas, exchange of information on markets and technical and financial aid and promotion of new markets," he said.
It was, the emir said "illogical that discrepancies between oil prices and gas prices increase in favor of the first despite the thermal and environmental advantages offered by the second."
But the much trumpeted summit fell short of expectations when only three heads of state responded to the invitation from the Qatari leader, whose country is not only the leading LNG exporter but the wealthiest nation in the world.
The presidents of Russia and Iran, the world's top two gas powers which along with Qatar form the troika that props up the GECF, stayed away. Only Algeria, Libya and Equatorial Guinea, which is to host the next ministerial meeting of the gas exporters' group next year, were represented at head of state level.
It was not immediately clear why Iranian President Mahmoud Ahmadinejad, who had been expected to arrive in Doha for the summit on Sunday, had chosen to stay away given that Qatar and Iran share the world's largest non-associated natural gas reservoir known as the North Field in Qatar and South Pars on the Iranian side.
One senior delegate expressed surprise that so many leaders of the gas exporters' forum, whose members control more than two thirds of the world's conventional gas reserves, had opted to skip the summit at a time when the gas industry was facing what the emir said was "increasing challenges."
The recurring mantra for gas exporters as oil prices rose in the wake of the slump at end 2008 has been oil-price parity for gas and an end to the disparity in gas prices between geographic regions as well as between fixed prices in long-term contracts compared with the weaker spot market price.
Russia, Qatar and Algeria, a major exporter to Europe, have all insisted that the only way to ensure stability and guarantee the interests of producers and consumers is through adherence to long-term gas sales agreements at fixed prices.
One delegate said the exporters wanted the value of gas prices prices to reflect a higher percentage of the value of oil rather than parity while taking into account calorific values, environmental benefits and other characteristics.
Algerian President Abdelaziz Bouteflika said the summit was being held at a time of "uncertainties regarding a fast and sustainable economic recovery in many industrialized countries affected by a severe crisis." This, he said, could "negatively impact the gas revenues we have planned to dedicate to the economic development of our countries."
This, in turn, could lead to the resurgence of security of supply for consuming countries and security of demand for producers, which are also facing the challenge of deregulated markets, a reference to the European market, where Algeria has a significant market share.
"We should ask ourselves if long term contracts will resist the political decisions related to deregulation, taken unilaterally without any consultation with the producing-exporting countries."
