Page 5 - FSUOGM Week 46

FSUOGM COMMENTARY FSUOGM

counterpart’s ability to assert pressure on prices, international organisations.”
even though it controls over half of global gas His Venezuelan counterpart, Tareck El
exports. This is primarily because of the nature Aissami, was more overt, calling for the GECF to
of the gas market. Gas is mostly sold via pipeline develop “the political will to take far more deci-
directly from a supplier to a consumer, making sive actions to control the gas market and obtain
the market fairly regionalised and pricing inflex- fair benefits for gas producing countries.”
ible. The market for oil is far more international. The group must establish “mechanisms of
As a result of a surge in LNG trade over recent effective interaction to maximise revenues of
years, however, the gas market has grown more member countries by balancing and stabilising
global in nature. Suppliers have access to many markets,” he said.
more buyers and vice versa, and the duration of GECF Secretary General Yury Sentyurin has
supply contracts has also been steadily short- also spoken in favour of closer co-operation, say-
ening. There has also been a move away from ing in June that he considered OPEC a “model”
oil-indexed prices to hub rates, and restric- for GECF’s activities.
tive destination clauses are being phased out. “Maybe not, it’s high time that the gas and oil
All these trends have made the market more industry implements the knowledge and solu-
competitive. tions of the oil industry. To use the best practices
It is unclear whether the mechanisms Shulgi- demonstrated by your community,” he said.
nov was referring to could involve co-ordinating
supply in the manner of OPEC. But officials from Resistance
a number of other GECF have also called for the The obstacle to OPEC-style joint action is likely
group to do more to manage the market. to be Qatar, the biggest LNG exporter in the
Algerian Energy Minister Abdelmadjid Attar world, which has dismissed talks of co-ordinat-
noted on November 11 that there was currently ing global gas supply in the past. The Gulf state
no means for sovereign countries to co-operate claims to have the lowest production costs in
and bring about greater stability in the gas mar- the world, meaning it is better able to withstand
ket, unlike their oil-producing counterparts. weak prices and has less incentive to form a sup-
“This is maybe an opportunity to explore ply pact.
through innovative thinking, possibilities for Any restrictions on production would also
such [co-operation] to be put in place for the interfere with Qatar’s ambitious LNG expansion
benefit of exporters, consumers and the indus- plans. Qatar is looking to raise its liquefaction
try,” Attar said. capacity by 33mn tonnes per year by the mid-
Nigerian Energy Minister Timipre Sylva 2020s to 110mn tpy, and then to 126mn tpy
meanwhile suggested that GECF could become towards the end of the decade.
a “balancing factor” in the market. Qatar Energy Minister Saad al-Kaabi made
“With 71% of the global gas reserves in the no reference to closer co-operation in his open-
hands of GECF members we believe that act- ing remarks to the meeting. Instead, he only said
ing together, the GECF can become a force for the group should continue advocating for gas “to
good and a balancing factor in the gas business,” the best of our ability.”
he said. “Nigeria would want to see more dia- “We are charged as a forum to enhance gas
logue and more collaboration among member business around the world and try to promote
countries, gas consumers and regional and gas,” he said. ™

Week 46 18•November•2020 www. NEWSBASE .com P5