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Mon 9 Apr 2007 05:31 PM

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Gas 'cooperation' forum set up

Association of gas producers could be the precursor to an OPEC-style cartel.

Leading gas producing countries will establish on Monday a high-level working group that will look at ways to boost cooperation and could eventually transform the forum into an OPEC-style cartel, energy ministers said.

Algerian Energy Minister Chakib Khelil said on the sidelines of a meeting of the Gas Exporting Countries Forum that the working group will be open to all members and was expected to present its findings at the next meeting in Moscow in 2008.

"The forum in Doha will create a working group that will look into establishing a gas organisation," Khelil told reporters. "We want to be certain of the use of this step and not go into anything without studying it."

Later asked by Reuters whether the move would ultimately lead to an OPEC-style group Khelil said: "In the long term, yes. In the long term we are moving towards a gas OPEC... It will take a long time."

Russian Energy Minister Viktor Khristenko told reporters in Doha that the working group would study pricing policy, the relationship with consumers and developing infrastructure.

"All the ministers support the creation of this group of experts," Khristenko said through a translator.

Gas producers discussed at the Doha meeting the idea of transforming the grouping into a cartel akin to the Organisation of the Petroleum Exporting Countries (OPEC), but sought to reassure consumer nations that it was business as usual for now.

Khristenko said this weekend that Russia, a leading gas supplier that has twice halted energy exports to Europe in pricing disputes with transit countries, had no intention of fixing prices at consumer nations' expense.

But he said at the forum that Russia would take a leading role in the gas producers' forum ahead of next year's meeting, particularly on pricing policy.

"Russia will spearhead the study into pricing policy," Khristenko said through a translator.

Since its formation in 2001, the gas producers' forum, responsible for around 60% of world gas exports, has been viewed by analysts as a talking shop.

Although the rising importance of gas as an energy source has raised its profile, they did not expect any radical decisions at Monday's meeting.

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