Putin urges gas exporters to adopt single pricing model


Russian President Vladimir Putin called on gas exporting countries to come up with a single pricing mechanism and resist EU market rules as he hosted Monday a summit with leaders from some of the world’s top energy states.
Putin received the likes of Venezuelan President Nicolas Maduro and Iran’s outgoing leader Mahmoud Ahmadinejad for the Gas Exporting Countries Forum at the Kremlin’s gilded halls.
The occasional series of GECF meetings are designed to group the natural gas producers into a tight-knit community of nations resembling the OPEC oil cartel.
But important differences in how the two hydrocarbons are supplied to global clients and the more regional nature of gas distribution have kept the GECF countries from building particularly strong bonds.
Putin said it was time for a fresh approach.
“Our priority is to provide stable deliveries to global markets in the long-term perspective,” Putin told the other leaders.
He said it was imperative for the countries to defend the practice of tying gas prices to those of oil and fighting the more temperamental nature of the spot market.
He also defended long-term contracts that bind clients to purchase gas within a specific price range for a number of decades and which Russia has recently been forced to abandon under pressure from some European states.
EU nations in particular abhor the link between the price of oil and gas because of the expanding supplies of the latter that have come in recent years thanks to the booming liquified natural gas (LNG) market.
Shale gas production in North America has also redrawn the energy map, with the United States no longer a perspective market for Middle Eastern and Russian gas.
Putin reiterated criticism of the European Union’s Third Energy Package that bars companies such as Gazprom from owning both distribution pipelines and processing facilities in the same country.
“The solidarity of exporting countries (in respect to the Third Energy Package) is imperative,” Putin said.
“We must jointly resist illegal pressure and more effectively defend the interests of gas producers and suppliers on international markets.” Venezuela’s Maduro for his part said it was time for the forum to transform itself into something more closely resembling OPEC.
“This forum must evolve,” he said. “It must become an organisation that unites the countries present here.” Iran’s Ahmadinejad in turn suggested that those gathered “come up with a pricing mechanism for different forms of gas.” He provided no immediate details and no firm commitments were expected to be made on Monday.
Putin was scheduled to hold individual meetings with some of the attendees on Tuesday.



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