- The Washington Times - Thursday, November 2, 2006

MOSCOW — Russian officials are pushing for the formation of a “natural gas OPEC” that would link Moscow with major suppliers in Central Asia and Iran to gain more clout against customers in the West.

If successful, the alliance would control more than half of the world’s known gas reserves and give Moscow powerful leverage as it seeks to strike a new long-term deal on energy with the European Union.

Valery Yazev, president of Russia’s Gas Society and chief parliamentary lobbyist for the state-controlled energy giant Gazprom, told the Itar-Tass news agency this week that former Soviet states such as Turkmenistan, Kazakhstan, Uzbekistan, Ukraine and Belarus could become part of the new alliance, with Iran a candidate for membership down the road.

“If problems surrounding Iran’s nuclear program are removed, I would like to see Iran in this alliance, too,” Mr. Yazev said.

The working name for the proposed cartel is IANNGO — the International Alliance of National Non-Governmental Organizations of gas producing and transporting countries.

Russia’s willingness to use its vast oil and gas resources to further political ends was on display again yesterday, when Gazprom officials announced plans to more than double the price of gas supplied to Georgia, which has infuriated its larger neighbor with an openly pro-Western and pro-U.S. foreign policy.

Already poor Russian-Georgian relations plummeted in recent weeks after Moscow’s harsh reaction to the arrest in Tbilisi of four Russian officers on spying charges.

Georgian Foreign Minister Gela Bezhuashvili, visiting Moscow when the price increase was announced, said politics clearly played a role in Gazprom’s move.

“Russia has not only used energy for political purposes with Georgia,” he said in an interview on Russian radio. “It is its trump card, which it has played on a global scale.”

Russian officials defended the abrupt price increase, saying Georgia and other former Soviet countries have been enjoying Soviet-era subsidies on their fuel shipment and should now pay market prices.

Russian President Vladimir Putin first floated the idea of a natural gas cartel in 2002. Genadi Zodanov, a Communist Party member of parliament, said a gas cooperation deal with Iran would create a strategic alliance with Tehran, giving the world’s two largest natural-gas producers the kind of clout OPEC’s Persian Gulf producers have wielded in the oil market for decades.

But the momentum behind the idea slowed as Russia prepared to host this year’s Group of Eight (G-8) summit in St. Petersburg for fear of offending Western partners.

Russia holds the world’s largest proven natural-gas reserves, nearly twice the reserves in the next- largest country, Iran. Together with Qatar, another potential cartel candidate, the three countries possess half of the world’s known natural-gas reserves.

Gazprom Deputy Chief Alexander Medvedev promoted the cartel idea in May when he threatened to create “an alliance of gas suppliers that will be more influential than OPEC” if European leaders did not meet Moscow’s price for the proposed new supply pact.

With the EU heavily dependent on Russian energy supplies and pipelines, the proposed supply pact, or “Energy Charter,” between Brussels and Moscow has sparked some tense negotiations.

EU leaders are pressing for a deal that would make it easier for European firms to invest in Russia’s energy industry and give European customers access to gas from Russian-controlled pipelines to Central Asia.

But Gazprom lobbyist Mr. Yazev told the RIA Novosti news agency that the charter “does not serve Russia’s interest because it determines the issue of access to our pipeline system.”

Iranian officials have expressed interest in a gas alliance with Russia.

During a visit to Moscow this past spring, Iranian Deputy Foreign Minister Manouchehr Mohammadi endorsed a “Russia-Iran oil and gas arc to unite the energies of our energy rich-countries.”

A little-known natural-gas alliance already exists, but the 15-nation Gas Exporting Countries’ Forum has no headquarters, no real staff and no power to curb supply or affect market prices.

David R. Sands contributed to this article.


Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide