London : Algeria's proposal for a natural gas supply cut to shore up falling prices would need the consensus of members of the Gas Exporting Countries Forum (GECF), the country's energy minister said.
The forum, which includes most of the world's largest gas exporters, is scheduled to meet in the Western Algerian city of Oran on April 19. Algerian Energy and Mines Minister Chakib Khelil said last week he will propose members restrict supplies on the spot market, following the recommendations of a study that will be presented to ministers in Oran.
"If there is a cut, it has to be agreed on by everybody," Khelil told reporters on Thursday in London, after he met with UK Secretary of State for Energy Ed Miliband.
US gas futures prices fell 25 per cent last year and have slumped 29 per cent so far in 2010 as an increase in production in countries including the US and Qatar has coincided with a slump in demand. Gas futures deliverable at the Henry Hub in Louisiana are trading near $3.97 (Dh14.57) per million British thermal units on the New York Mercantile Exchange, compared with a five-year average of $7.17.
Gas exporting countries support the idea of gas prices rising to match levels with oil, on an energy equivalent basis, Khelil said.
"All the leaders are for parity," he said. "We are going to work toward that. If you want a sustainable supply of gas in the long term, you have to have a price which is satisfactory to both buyers and sellers," he added.
While some analysts have dubbed the GECF as a "Gas Opec," it differs from the Organisation of Petroleum Exporting Countries because it doesn't set output quotas.
Khelil also said that gas buyers have not asked the North African country to reduce the quantity or price of gas it sells through existing long-term contracts.
Algeria is Africa's largest gas exporter and the third largest supplier of the fuel to Europe, after Russia and Norway.
Lately, the country has been earning about $7 per million Btu for gas it sells via long-term contracts, which are linked to the price of oil. High prices have prompted some European customers to take minimum amounts through long-term contracts. Those buyers may be mistaken if they expect to be able to secure adequate gas supplies through the spot market instead, Khelil said.
Full-time members of the GECF are Qatar, Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Russia, Trinidad and Tobago and Venezuela.
The forum, based in Doha has invited Kazakhstan, Yemen and Peru to attend the Oran meeting, Khelil has said previously.