Iran, Algeria to discuss OPEC-style gas group: report

TEHRAN (Reuters) - Iran and Algeria are expected to discuss the formation of an OPEC-style gas group during a visit by Algerian President Abdelaziz Bouteflika to Tehran, Iran's ambassador to Algeria said in remarks published on Sunday.

The two energy producers would also discuss broadening economic cooperation, Iran's Ambassador to Algeria Hussein Abdi Abyanah was quoted as saying by state-run newspaper Iran.

Bouteflika and five government ministers arrived in the capital of the world's fourth-largest oil producer on Sunday for a three-day visit.

Algeria's Energy and Mines Minister Chakib Khelil, also president of the Organization of the Petroleum Exporting Countries (OPEC), is accompanying Bouteflika on the visit, Iranian media said.

Iran wants to turn the previously toothless Gas Exporting Countries Forum (GECF) into a more formal organization akin to OPEC, the 13-member grouping which makes output decisions that can sway global oil prices.

Bouteflika backed the idea in a newspaper interview last year.

The United States and Europe have warned against such a grouping, saying it could pose a danger to global energy security and create room for price manipulation.

Algeria and Iran are both members of OPEC and the GECF. Russia will hold a ministerial meeting in November to discuss a charter for the forum, until now seen as a talking shop for gas producing nations.

Algeria is a major gas exporter to Europe. Iran is the world's fourth-largest gas producer but consumes almost all of its production. It exports a fraction of its output to Turkey, but also imports from Turkmenistan.

Iran's President Ahmadinejad visited Algeria last year and called for increased investment and trade links in gas, petrochemicals and the auto industry. Two-way trade between the two countries is small.

(Reporting by Zahra Hosseinian; writing by Simon Webb; Editing by Jason Neely)