The world’s largest natural gas exporters plan to cooperate with developing projects for the production and sale of fuel, raising prices and increasing supplies.
Today, officials from the Gas Exporting Countries Forum (GECF), who represent countries such as Qatar, Iran, Egypt and Algeria, agreed that fuel prices to generate electricity are too low. And the officials “…disagreed on how the Gas Exporting Countries Forum, a producers’ group set up to share market information and coordinate projects, could also help maximize the income of its 11 members,” reports Bloomberg.
Officials are aiming to shrink the space between prices of gas and crude oil but without lowering production. Vanguard reports the officials say a fair price is needed in order to achieve convergence between the prices of crude oil and natural gas.
Iran’s Oil Minister Rostam Qasemi called on the forum to develop “a comprehensive market management plan” that would allow them to react to demand fluctuations by adjusting supply, reports Bloomberg.
Gas prices are varied between the U.S., Europe and Asia because of the different amount of supplies needed, and prices in the U.S. are lower than in Europe. Bloomberg says, “Most LNG delivered by ship is sold under long-term contracts based on oil prices, while recent spot sales have driven some market prices lower.”
If rival gas producers can come to an agreement then the doors will be open to other markets. “Russia is the world’s largest gas producer and sits on 30 percent of global reserves, while Qatar is the largest liquefied natural gas (LNG) exporter with a production capacity of 77 million tonnes a year,” reports Vanguard.
Ultimately, the GECF is working towards a fair gas price. They also are working to obtain more investors to cover increased production expenses. The International Energy Agency estimated that about $10 trillion of investments would be needed in the gas industry until 2035.
GECF is not looking to control prices through production limitations. While they do look to protect the exporting nations, GECF also keeps in mind the interests and needs of the consuming nations.
That’s all for now,