Brunei's Local News - Brudirect.com

Bandar Seri Begawan - The ministers of the world's leading gas producers will discuss in Moscow, Russia, on December 23, the founding charter of the Gas Exporting Countries Forum (GECF), of which Brunei Darussalam is a member.

The Russian Energy Ministry said on Friday the GECF will agree on a draft charter on November 26 and will help the largely informal club morph into a more formal organization, which observers say could resemble the Organization of Petroleum Exporting Countries (Opec) in gas form.

The meeting was originally planned for mid-November but was delayed while the countries made preparations for the forum's charter, the ministry said in a statement.

Following a high-level GECF commission set for agreement on the Charter, the grouping, established in Tehran, Iran, in 2001, should become a permanent body holding regular

meetings to- discuss key developments in the gas markets, and could include other countries later on.

The member countries currently control about 73 per cent of the world's gas reserves and 42 per cent of its production.

Its formation amused fears from big consumer nations such as the EU and the United States, which have argued that the market should set gas prices.

Both have repeatedly warned that an Opec-style gas group could pose a serious danger to global energy. The reserves of Russia, Iran and Qatar combined boast more than half of the global total.

Global No 1 gas producer and largest reserve-holder Russia held talks with Iran and Qatar, ranked second and third biggest holders of natural gas reserves, this week after they formed what Moscow called a "big gas troika" last month.

Russian Prime Minister Vladimir Putin said on Tuesday that fears by Western consumers over price manipulation by the group were ungrounded.

"We are aware of the concerns and fears expressed by some energy consumers," Putin said. "There are absolutely no grounds for such fears. We are not establishing a cartel, nor are we striking any cartel deals."

"However, energy producers, as well as consumers, have the right to and must coordinate their decisions, exchange information, and do their best to ensure uninterrupted hydrocarbon supplies on global markets," Putin said, adding that uninterrupted supplies and reasonable prices were the main objective of the grouping.

The forum also includes Algeria, Bolivia, Indonesia, Libya, Nigeria, the United Arab Emirates, Egypt, Venezuela, Trinidad and Tobago, Brunei and Malaysia. Norway and Equatorial 'Guinea are observers.

Almost all of Brunei's natural gas is liquefied at Brunei Shell's Liquefied Natural Gas (LNG) plant, which opened in 1972 and is one of the largest LNG plants in the world. Some 90 per cent of Brunei's LNG is sold to Japan under a long-term agreement renewed in 1993.

The agreement calls for Brunei to provide over five million tonnes of LNG per year to three Japanese utilities, namely to TEPCo, Tokyo Electric Power Co, Tokyo Gas Co and Osaka Gas Co. Japanese company Mitsubishi is a joint venture partner with Shell and the Brunei Government in Brunei LNG, Brunei Coldgas, and Brunei Shell Tankers, which together produce the LNG and supply it to Japan. -- Courtesy of The Brunei Times