Results of GECF summit

The first gas summit of the Gas Exporting Countries Forum (GECF) finished in the Qatari capital Doha on November 15, 2011. No really significant decisions or strategically important documents were made at the meeting. The sides just promised to continue joint work on providing efficient and reliable gas supplies to ensure stability on world gas markets and on “a fair gas price”, which is a very unclear definition, as the notion “fair” can be interpreted absolutely differently. In other words, the GECF participants agreed to agree without undertaking any real obligation.

It is indicative that the GECF summit was not attended by state leaders of the majority of member states. Russia was represented only by energy minister Sergey Shmatko, who declared that a preliminary agreement had been reached with Qatar not to increase Qatari LNG deliveries to European markets. In exchange Qatar may theoretically get a stake in NOVATEK and Yamal-LNG.

So far, all such plans look very tentative and even speculative, as the sides did not undertake any legal obligations. Despite all declarations on partnership, Qatar is definitely considered a major threat to the Russian share on the EU natural gas market and one of the main hopes of adherents of refusing long-term contracts on   natural gas supplies. The main thing is that Russia has no arguments to convince Qatar not to launch new LNG projects after 2014. The agreement Shmatko referred to concerns the next few years while a moratorium on new investment projects in Qatar is in force. As far as the idea of Qatar entering Russia’s new Yamal projects is concerned, this variant is rather doubtful – Qatar has sufficient domestic reserves, the cost of their production is lower and logistical arrangements are less complicated.

By Stanislav Mitrakhovich, NESF leading expert