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Russia is still considering the idea of establishing an international natural gas cartel similar to OPEC and will coordinate its actions on the issue with other major gas producers
Russia is still considering the idea of establishing an international natural gas cartel similar to OPEC and will coordinate its actions on the issue with other major gas producers, President Vladimir Putin said Monday. Iran proposed to Russia in late January establishing "a cooperation organization in the gas sector similar to OPEC." The Russian president supported the idea despite skepticism voiced by various Russian officials and lawmakers. "Who said that we have rejected the idea of a cartel?" Vladimir Putin said at a joint news conference with the emir of Qatar. "I said it was an interesting idea." "Whether we will establish this cartel or whether we need it is a separate issue," Putin said, adding that natural gas producers should coordinate their actions on the matter. Putin initially welcomed the idea at an annual news conference with the Russian and foreign media at the beginning of the month, saying that such an organization could coordinate policies in the gas sphere to ensure uninterrupted supplies, but should not fix prices like the Organization of Petroleum Exporting Countries (OPEC). OPEC was founded in 1960 by major oil suppliers Venezuela, Iraq, Iran, Kuwait and Saudi Arabia. Today the organization also includes Algeria, Angola, Indonesia, Libya, Nigeria, Qatar and the United Arab Emirates. OPEC's main aim is to coordinate the oil policies of its member states to protect their interests and ensure stable prices on world oil markets. Russia is the largest oil-producing nation outside the cartel and has the world's largest gas reserves. Unlike oil, which is traded in a global marketplace, natural gas is currently sold in fragmented markets mostly through futures contracts, and producing countries do not work together to try to influence the markets. Russian and other natural gas producers will discuss the possible establishment of an alliance between major gas exporters at a conference in Doha in April, the Russian and Qatari leaders said on Monday. "Our experts will attend the conference in Doha in April," Putin said. The Russian president said gas exporters should not only coordinate their activities, but also develop a system of partner relations with global consumers. "It is important to develop common approaches, equal conditions for gas producers, and a system of relations with gas consumers," Putin said. "That is why we are interested in developing relations with Qatar in this sphere." Contacts between Qatar, which has the world's third-largest gas reserves of 11.2 trillion cubic meters, and Russia's Gazprom [RTS: GAZP], the world's largest gas producer, have intensified during the last few years of Putin's presidency. On Monday, LUKoil Overseas Holding Ltd, a subsidiary of Russia's largest crude producer LUKoil [RTS: LKOH], and Qatar Petroleum signed a Memorandum of Understanding on cooperation in the prospecting and development of hydrocarbon deposits which suggests the oil companies will consider joint implementation of oil and gas projects in Qatar.
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