OPEC idea to loom over gas producers meeting

DOHA (Reuters) - Big gas powers meet in Qatar on Monday when they are expected to broach issues ranging from soaring production costs to whether they could ever set up a price-fixing cartel.

Speculation the Gas Exporting Countries Forum (GECF) is seeking to form the gas equivalent of the Organization of the Petroleum Exporting Countries (OPEC) has been repeatedly knocked down and the subject is not on the meeting's official agenda.

But that does not mean it will not be discussed.

Algerian Energy and Mines Minister Chakib Khelil has said the idea of a gas OPEC was not initiated by the producer countries and had grown out of the fears of consumer nations.

"It is the consumers really that deep in their subconsciousness want to have a monster," Khelil said, although he added the GECF could consider the issue.

"We may end forming a group of experts in the area to think about it and to keep thinking about it," he said.

Officials from Russia, the world's biggest gas power, have been among those to reject the gas OPEC idea, although the denials are not quite unanimous.

"We believe that any instrument which can play a certain market role and defend the interest of producers will be useful. We as producers should have a chance to set up a properly functioning institution," said Stanislav Tsygankov, head of external relations at Gazprom.

In line with resource nationalism -- or resource-holders retaining a greater share of their wealth -- gas producers could collaborate at the expense of consumers and international oil companies (IOCs) without necessarily creating a cartel.

"The real threat is to the IOCs," said Frank Harris of consultancy Wood Mackenzie. "They would cooperate to the exclusion of the IOCs."

Russian gas export monopoly Gazprom (GAZP.MM) has already agreed to cooperate with Algeria's state-run Sonatrach.

"It is a big issue for the IOCs in terms of accessing growth," Harris added.

Equally, the resource-holders might try to thwart the European Union, which is striving for market liberalization and the demolition of monopoly-like control.

"Europe is trying to create a more competitive internal market for gas, transportation and so forth," said Giacomo Luciani, senior consultant at the Gulf Research Centre. "Russia is trying to torpedo this because it is damaging to their interest. Algeria is also worried, although less so."

RISING IMPORTANCE

The GECF was founded in 2001 and has held annual ministerial meetings, with the exception of last year when it did not meet.