GECF member-countries plan to exchange views and experiences as well as coordinate on gas-related issues, "including the present and anticipated supply-demand balance for gas, as well as the structure and developments of regional and global gas markets," GECF Secretary General Leonid Bokhanovsky told Platts in an exclusive interview ahead of the summit.
The first summit of the GECF, whose members control some two thirds of global gas reserves and which is dominated by Russia, Iran and Qatar, was held in 2011 in Doha, around 10 years after the group's inception.
In the second gas summit, which is to take place in the Kremlin, Russian President Vladimir Putin expects to meet with Venezuela's President Nicolas Maduro, Iran's outgoing President Mahmoud Ahmadinejad, Bolivian President Evo Morales and Libyan Prime Minister Ali Zeidan, Putin's aide said earlier this week, adding that a number of other meetings have been discussed.
The second summit will take place at a time when the gas market is witnessing major changes such as the so-called shale gas revolution in the US, increasing competition for customers and uncertainty over future gas demand --all in all allowing some analysts to call it a "dark age of gas," and "the renaissance of coal." In contrast, the first summit was on the cusp of what the International Energy Agency had said might be the start of "a Golden Age of Gas."
But Bokhanovsky said the GECF fully disagrees with such an opinion. "When you talk about dark, for us it only means Development, Affordability, Reliability and Known Energy [DARK], which is no other than natural gas," Bokhanovsky said.
By dubbing it the Golden Age of Natural Gas, the IEA "opened a path of opportunities for natural gas by deeming it the fossil fuel of choice -- the most appropriate compromise to current world challenges of energy efficiency, environmental concerns, and security of demand-supply," he said.
Bokhanovsky said the GECF member countries "are fully cognizant and responsive to the dynamics of the gas market and are aware of the challenges that may arise."
The members "are prepared to confront these challenges as they occur," he said.
"Current challenging areas for all gas exporting countries and other energy participants include vulnerability in the security of demand, energy policies in place mainly in consumer countries and particularly within Europe, the EU plans to diversify their energy supply and to develop local energy resources," he said.
Bokhanovsky reiterated that the GECF, which initially had to defend itself against accusations that it was trying to establish a gas cartel similar to OPEC, is not intended to manipulate prices or volumes to support the interests of gas producing countries.
"The level of coordination of the member countries does not include -- nor does it intend to -- the management or control of pricing mechanisms," he said.
"Accordingly it must be noted that the increase of gas supply in the market does not only mean more competition for current players, but also greater flexibility for buyers and suppliers. Flexibility translates into cooperation and coordination to take place between the parties involved," he said.
Since an April 2010 ministerial meeting in the Algerian city of Oran, the group has dropped talk of limiting production or withholding supply from the spot gas market, a proposal that was being pushed aggressively by former Algerian Oil Minister Chakib Khelil.
The GECF unites 13 countries -- Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Oman, Qatar, Russia, Trinidad and Tobago, United Arab Emirates and Venezuela. Kazakhstan, Iraq, the Netherlands and Norway have the status of observer members. Of these, eight counties are also OPEC members.
Bokhanovsky said two countries have recently expressed their interest in joining the GECF and "are in the process of applying for membership to the organization." He, however, declined to name those two applicants.
SHALE GAS
When sharing his view on the much-discussed "shale gas revolution" in the US, Bokhanovsky said that uncertainty over the prospects for development of shale resources elsewhere in the world adds to the general ambiguity surrounding the future of the gas market, amid a slowdown in economic development around the globe.
"It remains to be seen if the shale revolution could be replicated elsewhere in the world and especially in Europe, where there are legal constraints for possible development of the resources," he said.
"Shale gas seems to be everywhere, it seems that the entire world is rich in shale gas resources. However, there are too many uncertainties on whether shale gas will rapidly expand globally, which is accordingly increasing uncertainty about supply and demand," he added.
The GECF believes that there are still many concerns to be examined before considering the current shale gas reality a "revolution," he said.
His comment echoed those by the head of the International Energy Agency, Maria van der Hoeven, who earlier in the month had said that there were major obstacles that would impede the development of shale gas in Europe and China.
In its latest medium-term gas market outlook, the IEA revised down its gas demand growth forecast to 2.4%/year until 2018, from 2.7%/year previously. The IEA blamed "persistent" demand weakness in Europe and production difficulties in the Middle East and Africa for the lower rate.
