Gas group 'to help global pricing structure'|
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INTERNATIONAL. A leading international energy analyst believes the coming together of major producers Qatar, Iran and Russia will help achieve global pricing of liquefied natural gas.
The three gas powers have recently agreed to strengthen co-operation at a meeting in Tehran following which Iran said there was consensus for an OPEC-style group.
Russia, Iran and Qatar are ranked first, second and third biggest holders of natural gas reserves in the world and together account for more than half of the global total.
“Natural gas is a premium fuel. It is an outstanding fuel because it is much more environmentally-friendly than many of the other alternatives that are available today,” John Westwood, managing director of UK-based Douglas-Westwood said in an interview for Qatar's Gulf Times.
“Therefore, natural gas must be priced really more on a global basis,” he said.
The global demand for liquefied natural gas is expected to grow by about 86% by 2016. Due to its burgeoning energy demand, China’s coal consumption has gone up 84% between 2000 and 2007. Currently, China consumes about 39% of the world’s coal.
“The fact that China’s economic development has really been fired by coal-based power stations; you can imagine the level of pollution in that country. It is terrible. Natural gas is a much cleaner alternative,” Westwood said.
He said though crude oil and natural gas were priced differently, some developments within the LNG sector have facilitated spot markets for liquefied natural gas.
But the situation is quite different in various parts of the world, he pointed out.
For example, within Europe, natural gas wags oil price by six to nine months. Russia meets 20% of Europe’s natural gas needs now.
“Although the oil price has risen in the first few months of this year and has fallen thereafter, its impact on natural gas prices has not yet been felt in Europe. The price of natural gas for average user in Europe is going to increase in the new few months,” Westwood said.


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