Algeria's Attar calls for gas exporters' group GECF to study stronger role

London — Algeria's energy minister Abdelmadjid Attar said Nov. 11 it could be time to explore the possibility of strengthening the role of the Gas Exporting Countries' Forum (GECF) and to consider whether collaborative action by its members could be taken to help stabilize gas markets.

Attar, speaking ahead of the 22nd ministerial meeting of the GECF due to take place by videoconference on Nov. 12, said the COVID-19 pandemic was expected to lead to global gas demand dropping by at least 3% in 2020, putting pressure on prices.

"There is no mechanism -- like for oil -- where sovereign countries could act cooperatively and collectively to bring stability to the gas market, especially in times of crisis," Attar said in a keynote speech Nov. 11 to a ministerial roundtable convened ahead of the formal meeting.

"This is maybe an opportunity to explore through innovative thinking, possibilities for such [cooperation] to be put in place for the benefit of exporters, consumers and the industry," Attar said.

Algeria is hosting the ministerial meeting of the GECF as part of a virtual summit of the forum running from Nov. 9-12.

The GECF -- whose members include gas heavyweights Russia, Qatar and Iran -- came into being in 2001 and holds around 70% of the world's proven gas reserves.

Over the past decade there has been speculation that the GECF could morph into a "Gas OPEC" with the power to manage markets through supply intervention, but the group has so far ruled out coordinated market management.

However, it is thought that some GECF member states and observer countries are increasingly keen on considering a strengthening of the GECF's role, including the potential for taking collaborative action in the interests of market stability.

New projects

Attar also also warned that exporting countries should not alone bear the risk of developing new projects.

"Historically, the equitable sharing of risk between exporters and consumers has [allowed] us to mobilize the huge financial resources necessary for gas chain development," he said.

"A shift to a market functioning where risks related to volume or price are solely born by exporting countries may not be viable in the medium- to long-term," he said.

New LNG export projects in particular have traditionally been dependent on buyers committing to taking long-term volumes in order for lenders to consider the projects as economically viable.

But in recent years, buyers have been looking for more contractual flexibility and have been less willing to agree to long-term supply contracts.

GECF Secretary General Yury Sentyurin, in his address to the roundtable, struck an optimistic tone despite the COVID-19 pandemic's impact on the sector.

"GECF member countries are among the lowest-cost producers and are able to weather the current storm or any other," Sentyurin said.

"Our members displayed outstanding discipline and resilience in the continued fulfilment of their obligations toward all contracting parties," he said.

"This indicates confidence in the strength of their economies and their abilities to absorb major economic crises, notwithstanding numerous challenges and declines in revenues."