Iran's Mohammad-Hossein Adeli was elected on Sunday as the new secretary general of the Gas Exporting Countries Forum for a two-year term.

Iran proposed the establishment of a gas cartel, dubbed sometimes as the "gas OPEC", in 2001. The country hosted conferences and meeting to materialize the idea, which was finally achieved in 2009.

The mission of a cartel is to coordinate the policies to secure a steady income to the member states, define and set outputs and prices, and to secure supply of goods to the consumers. OPEC is a good example of such a cartel.

Some gas exporting countries such as Qatar and Russia were not in favor of establishing a gas cartel, to be used as a political tool, therefore the idea could not be materialized. On October 21, 2009, the gas exporting countries consented to change Iran's proposed name of "gas cartel" to the "Gas Exporting Countries Forum" and turned the mission of that totally deferent from what Iranian President Mahmoud Ahmadinejad wanted to be. Eventually, the forum was set up and its secretariat was established in Qatar. Russia's Leonid Bokhanovsky was also named as the GECF's secretary general for a two-year term. However, his term was extended to four years.

In November 2012, the GECF ministerial meeting selected Iran to chair the forum's ministerial meeting in 2013, replacing Russia.

Logical and realistic

Although Iran is the largest holder of gas reserves in the world and plays a strategic role in the future of the global gas market, but the country's former President Mahmoud Ahmadinejad's extremist slogans were used mainly to take advantage of natural gas as a political tool to put pressure on Western powers. However, President Hassan Rouhani's speech in the GECF meeting in Tehran showed the country's logical point of view which is based on realities.

The previous administration in Iran used the term 'gas OPEC' even after the cartel was officially renamed to the Gas Exporting Countries Forum. In the second ministerial meeting of the GECF, which was held in Russia on June 1, Ahmadinejad proposed the regulation of pricing methods and market control, and stated that it was unfair that buyers of fuel make benefit more than owners.

But, Hassan Rouhani addressed the GECF meeting and expressed the hope that Iran would play an effective role in coordinating members and sharing experiences. He also said that there are both common interests and competition among the gas exporting countries. This issue shows that Iran is well aware of realities in the gas market.

Objectives of GECF

The GECF is a multi-layered and an intergovernmental organization of the world's leading natural gas producers comprising Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Oman, Qatar, Russia, Trinidad and Tobago, United Arab Emirates and Venezuela. Kazakhstan, Iraq, the Netherlands and Norway have the status of Observer Members.

GECF members' gas reserves, output and consumption based on BP annual report for 2012

* Based on the U.S. Energy Information Administration's reports

The world's total proved gas reserves until the end of 2012 was 187.3 trillion cubic meters, while the production and consumption amount were 3363.9 and 3314.4 billion cubic meters respectively.

Regarding BP statistics, GECF members shares about one third of world's total gas output, but their consumption is huge as well. For instance, Iran's oil minister announced last week that the country is unable to export any surplus gas until March 20, 2015. However, Russia and Qatar enjoy huge level of surplus gas to sell.

GECF says on its official website that "The Mission and objective of the Forum in accordance with the Statute is to support the sovereign rights of member countries over their natural gas resources and their abilities to independently plan and manage the sustainable, efficient and environmentally conscious development, use and conservation of natural gas resources for the benefit of their peoples".

Then, this mission is absolutely in contrast with Iran's past intention to control gas markets and prices.

Regarding the gas price issue, the contracts mostly are set based on oil or oil production in 20-year or more terms. The gas markets - despite the oil which is easily transferable by tankers to any point of world - are mostly regional markets, because two third of gas exports in the world are carried out via pipelines. Then setting gas prices in various regions defers and depends on various conditions.

Only, liquid natural gas (LNG) export conditions is partly similar to crude oil's, which can be transferred via tankers to any region, however, according to BP report, only Qatar (with 105.4 bcm), Russia (with 14.8 bcm) and Algeria (with 15.3 bcm) were the GECF's liquid gas exporters in 2012.

Some 328 bcm of LNG has been exported during 2012 in the world, while 705.5 of the exported gas were carried out by pipelines.

There is no fixed price for the LNG in the global markets as well. For instance, the prices in Pacific region are deferent from Japan's markets.

Dalga Khatinoglu   /Trend/