Igor Ivanovich Shuvalov, a senior aide to Russian President Vladimir Putin, told reporters last week that there is no way Russia would ever support creating an OPEC-style cartel for natural gas.
"The responsibility of gas providers must be greater than that of oil providers, because there are far fewer such countries, and no market of liquefied gas....we would never come out in favor of an initiative for creating an organization that would be setting prices. We are for the predictability of all supplies, without any fluctuations," Shuvalov said.
Click here to read the full ITAR-TASS article. You can also read a Forbes magazine interview with Igor Shuvalov here. Click on the extended post to read more about Russia's growing role in the global market for liquefied natural gas.
A map of current and proposed LNG terminals in the U.S. as of 2005
Source: Federal Energy Regulatory Commission (FERC) website
Russia has the world's largest natural gas reserves, with an estimated 27% of the total worldwide. There has been considerable speculation among some Western and Russian commentators that Russia would join with Iran and Qatar to form a cartel modelled after the Organization of Petroleum Exporting Countries.
However, the global marketplace for liquefied natural gas (LNG) is still in its infancy. Even in the present period of high oil prices, compressing/liquefying for shipment in LNG tankers can be expensive compared to using locally produced gas (which the Americas still have in abundance) or petroleum product alternatives for the petrochemicals industry. As a result, the biggest customer in the global LNG market is Japan, an island nation that has no domestic oil and gas reserves.
High construction costs, safety concerns, and strong not-in-my-backyard (NIMBY) opposition have stymied plans to build several proposed LNG terminals at Atlantic and Pacific coast ports in the U.S. However, the Gulf of Mexico remains a likely destination for more LNG tankers in the future. Last year Russia's OAO Gazprom opened an office in Houston to develop their LNG business in North America.