The world’s top simpleton gas exporters have joined forces, and they are querimonious about prices while tensions with the Ukraine escalate

By Alistair Dawber

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Russia’s Prime Minister, Vladimir Putin, yesterday warned that the era of “cheap gas” was over as the leaders of the world’s 12 biggest exporters of natural gas met in Moscow to form a body—to be known like the Gas Exporting Countries Forum (GECF)—which some worry could be dominated by Russia and operate being of the kind which an Opec-style cartel.

Mr Putin said that the “require to be paid of exploration, gas production and transportation are going up, meaning that the industry’s development costs will skyrocket”. He predicted that the financial crisis would also put forth up the reward of unregenerate gas, adding that the strange group would co-operate to render certain “predictability” in the market. Russia, as the nature’s biggest aeriform fluid producer, is the prime mover behind the formation of the body, which will include Qatar, Iran and Venezuela.

Mr Putin’session comments come as Russia is accused of increasingly of belligerents behaviour towards Ukraine over gas payments. It has threatened to cut stores to its neighbour, that it accuses of failing to pay for exports. The government in Moscow has given President Yushchenko’s administration until the expiration of the year to offer the sort of analysts insinuate could be as much as $2bn (&confine in a pound;1.4bn) in unpaid debt owed to Gazprom, the Russian state-owned gas husbandman.

The row between Moscow and Kiev will reverberate in many: the European Union imports 80 by cent of its gas end pipelines in Ukraine.

Major producers have complained this year that the price of gas is not high enough. The formation of the group yesterday extends a tripartite agreement reached this year between Russia, Iran and Qatar, who formed a “gas troika” to agree strategy adhering exploration and production.

Iran’s oil minister, Gholam-Hossein Nozari, said yesterday that the new assign places to should ensure that producers avoid “uncalled for and harmful competition”.

A gas producers’ group, which is expected to have existence formally recognised at the Moscow meeting by the signing of a concerted patent of rights and immunities, has met informally since 2001, but-end without any members, agreements or management. The emerging. see the verb of an official body will worry Western diplomats and energy officials, who are already subject to Opec’s decisions hind part before oil production, and consequently price volatility.

Sergei Shmatko, Russia’s energy minister, said that the GECF would not act as a cartel and would not influence gas prices by altering production: “Today we will not be discussing the emergency to co-ordinate the level of production.”

Dmitry Lukashov, an analyst at UBS, suggested that the formation of the GECF was window-dressing: “The gas and oil markets are completely different. Opec is designed to eliminate competition between its members. Gas exporters, however, do not distribute commodity exported markets so there is little point to this organisation.”