Berliner Boersenzeitung - Ukraine showdown casts shadow over Qatar gas summit

The 11-member Gas Exporting Countries Forum holds its annual summit as the Ukraine showdown sends prices ever higher while Europe fears for its supplies from Russia.

The group that includes Russia, Qatar, Iran, Libya, Algeria and Nigeria -- accounting for more than 70 percent of proven gas reserves -- has faced mounting pressure as Europe has sought alternative suppliers to Russia.

But most say they are already at or near maximum production and can only send short term relief supplies to Europe if existing customers agree.

Diplomats who took part in preparatory meetings said the group -- which does not include key producers Australia and the United States -- will discuss ways to increase production in the medium term.

"But their hands are tied, there is next to no spare gas," said one, speaking on condition of anonymity.

After two days of ministerial meetings, Iran's President Ebrahim Raisi, who has rarely left his country since taking office, is to join Qatar's emir, Sheikh Tamim bin Hamad al-Thani, for the summit on Tuesday.

Putin is not expected to take up his invitation to attend despite his country's importance, diplomats said.

Thierry Bros, a professor at the Institute of Political Studies in Paris who specialises in the gas industry, said Russia has a dominant role in the industry as its Gazprom giant is the only enterprise with spare capacity.

"So it is Putin who decides and he decides at the Kremlin."

- Contract demands -

Bros said the forum would probably reaffirm its message to Europe that it needs to sign long term contracts to secure a guaranteed supply.

All producing countries will have to make massive investments to increase their output but the European Union has long resisted contracts of 10, 15 or 20 years. Now, however, it has vowed to transition to clean energies and also faces the Ukraine crisis.

"The meeting is interesting because there are the Russians, with whom we no longer like to speak, and the Qataris, who are big friends with the European Commission, again to try to get liquefied gas.

"For Russia and Qatar, the aim is to maximize revenues and guarantee a long term market for their gas commodity," he said.

- Ukraine link -

Qatar has increasingly sought to boost its diplomatic sway as a mediator and facilitator so Ukraine could also be discussed in talks, according to Andreas Krieg a security specialist at King's College London.

"Qatar could use this forum to reach out to Russia over Ukraine as all parties are concerned over what an escalation in the crisis would mean to global gas supply security."

He said Russia may want contacts with Qatar as European customers look to the emirate as an alternative supplier. Russia currently has a 40 percent share of the European market and Qatar five percent.

"It would be quite an opportunity if Qatar could use the forum to offer their good offices to the United States to mediate between them and Russia in this crisis."

Qatar and Iran also have overlapping gas interests in the Gulf and the emirate has been seeking to help diplomatic efforts to revive a 2015 nuclear deal between Iran and major powers.

"Sanctions relief for Iran would ultimately also affect the gas sector and gas exports, which would be conducive to the forum's overall objective of maintaining gas supply security," Krieg said.

(S.G.Stein--BBZ)