Russia, Qatar Discuss Natural Gas Cartel

Leaders of natural gas-rich Russia and Qatar announced Monday they would explore the creation of a natural gas cartel to represent the interests of producer countries in controlling the global market.

Russian President Vladimir Putin and Qatari Emir Sheik Hamad bin Khalifa Al Thani told reporters here that they wanted more cooperation among competing gas producers as a way to coordinate relations with countries that import gas.

"We do not reject the idea of creating a gas cartel," Putin said. "But this initiative requires more study."

European Union leaders have said they would stand against any effort by Russia to create such a cartel, fearing gas prices — and Russia's political clout — could rise dramatically as a result. Europe imports a quarter of its gas from Russia.

Putin said he would send a team of experts to a natural gas conference being held in Doha in April, where they would discuss details of building a cartel resembling the Organization of Petroleum Exporting Countries. Qatar is an OPEC member but Russia is not.

"Some say Qatar and Russia are competitors but we're not, we have separate markets," Putin said just hours after arriving in the tiny Gulf state after a two-day visit to neighboring Saudi Arabia. "But for us it's important to cooperate and to help each other. We also work together to defend the interests of gas exporters and coordinate our relations toward the consumers."

Sheik Hamad said he supported the discussions but was unsure whether a gas cartel would be able to command the same market control as OPEC. Compared with spot oil sales, gas is sold on contracts arranged on much longer terms, as long as 25 years, and a cartel would have little influence on such arrangements, Sheik Hamad said in a press conference in his opulent presidential palace.

Russia and Qatar are two of the world's largest producers of natural gas, and tiny Qatar sits atop the world's single largest gas field.

Connecticut-sized Qatar is home to a pair of large U.S. military bases, one of which houses the U.S. command post for operations in Iraq and Afghanistan. The Qatari government also owns the Al-Jazeera TV network.

In January, Iran — which is developing its gas industry — said it was in favor of forming a cartel. The country's supreme leader Ayatollah Ali Khamenei proposed Iran and Russia create a gas cartel in talks with the head of Russia's Security Council, Igor Ivanov.

But at the time, Ivanov said there were no plans for a cartel, only "interest in gas producers coordinating their policies in the gas sphere."