World Gas Exporters Weigh Closer Grouping; Big Explosions From The Middle East.

*** More Ayatullahs In The Muslim World Warn That A US Attack On Iran Would Get The Shi'ites To Rise Against The Americans 'Everywhere' - Including In Lebanon, Saudi Arabia, Iraq, Bahrain - Etc; But All Remember Khamenei Saying The Theocracy Will Defeat The US Empire On The Lebanese Front, Where Hizbullah Is Getting Ready For A 'Divine' Confrontation With The Greater 'Satan' - Little Satan Russia Will Be Watching

*** The Syrian Link Between Assad's Regime & Israel, A Retired Businessman Called Ibrahim Suleiman, On April 12 Addressed The Israeli Foreign Relations And Defence Body In Jerusalem; He Said He'll Keep Trying For Peace

NICOSIA - The world's main natural gas exporting states are to have a new pricing formula which will have implications for the global energy business. This was one message out of the Middle East in April. But what shook the world this month was the set of explosions which, apart from having killed many people, promised to have much more serious implications for global peace.

At its first meeting in two years, the 12-state Gas Exporting Countries Forum (GECF) convened a ministerial conference in Doha, Qatar, on April 9-10 and decided to set up a high-level study group led by Russia to examine closer collaboration. The meeting was also attended by two other states yet to become members of the GECF.

A Neo-Salafi suicide bomber on April 12 blew himself up inside the heavily guarded Iraqi parliament building, killing a Sunni MP and wounding at least 22 people, and dealing a blow to a US security plan for Baghdad. Claimed by al-Qaeda, the lunchtime attack in parliament's cafeteria, inside the fortified Green Zone, cast doubt on the ability of even the most stringent measures to provide a safe, neutral space in the Iraqi capital for politicians to meet. By April 14, 52 US troops had died in Iraq in this month.

Next door, the Shi'ite theocracy of Tehran is still bracing for a much bigger explosion caused by its nuclear ambitions and by what is happening in Iraq (see sbme4-IraqUS-IranNukeIssueApr16-07).

World leaders on April 11-15 decried Neo-Salafi suicide bombings in Algeria and Morocco claimed by al-Qaeda Organisation in the Islamic Maghreb (QOIM), which on April 10-14 killed at least 41 people and wounded about 237 others. The Arab League condemned "these terrorist acts and what they represent and aim to achieve". Tehran called the attacks "inhuman and hideous". Western states have since reduced embassy services in Algeria and Morocco, urging their citizens to avoid travelling on predictable routes.

QOIM, a North African franchise of a globalised al-Qaeda brand, published photographs of its three Algiers suicide bombers in an Internet statement and said the bombings killed at least 53 people. Faisal Devji, an associated professor of history at the New School in New York, said in an April 13 article al-Qaeda's life as a movement lay it its death as an organisation. Given its militant obsession with martyrdom, he said, "this life after death should come as no surprise to us".

Bashar al-Assad , who in mid-2000 inherited Syria's Alawite/Ba'thist dictatorship from his death father, Gen. Hafez, is determined to blow up all plans for an international tribunal to try the killers of Lebanon's former PM Rafiq Hariri. He is counting on the "divine" powers of Lebanon's opposition which is led by the Iran-sponsored Shi'ite guerrilla movement Hizbullah. This is the global time-bomb of the extremist end of Shi'ite Islam, just as the Neo-Salafis are the global time-bomb of the extremist end of Sunni Islam.

Middle East trouble spots keep heating up from other hot areas nearby, such as Sudan's western region of Darfur and Somalia. A local franchise of al-Qaeda in Somalia is determined to return to power through Neo-Salafi suicide bombers ousted in early 2007 with the help of US-backed forces from Ethiopia.

With the US still trying to establish some version of its GME plan in the middle of the two Islamic extremes, Russia is preparing to host the 7th conference of the gas exporters' forum (GECF) in 2008 with plans to upgrade this to become a closer organisation. Russia is heading GECF's top-ranking committee which is to work out a more suitable pricing formula for the export of natural gas by pipeline and liquefied natural gas (LNG) by tanker. The Doha event was GECF's 6th meeting since it was established in Tehran in 2001.

A cleaner source of energy than oil, gas is still being priced according to oil's market value. But the ministers balked at the word "cartel". The ministers said they were not seeking to fix gas prices or limit gas supplies to consumers. But escalating demand and surging costs which have forced project cancellations or delays have focused minds on ways of working together.

Experts at Doha said gas was gaining an edge over oil due to its environmental advantages. It was necessary for the value of gas to be established on the basis of these advantages. Russia's taking the lead in the top-level committee is crucial in boosting GECF's credibility. A key issue for the committee is pricing as the gas market evolves. The advent of LNG has transformed the pricing landscape, although gas is still far from being a global commodity.

On a "gas OPEC", one expert said: "It took five years for OPEC to have a secretariat and another five to ten years for it to be influential. It could take gas longer as it's more complicated, but we are working on it... The committee is very important. At the moment, gas markets are regional. But the trend is towards a global market. So we have to be prepared to face this".

Gas prices are too cheap compared to oil, especially in view of soaring costs of bringing on new production. The FT on April 10 quoted Trinidad and Tobago Energy Minister Lenny Saith in Doha as saying the key issue was how gas producers - and the GECF - adapted to rising product costs and a changing energy market, adding: "The right context is: as a group of producers faced with these challenges, how do we move forward? [A] cartel is the last thing. How do you have a cartel [with] LNG contracts, long-term contracts? The whole structure of the industry is different. It's taking oil out and selling it everywhere, so it's a different ball game".

GECF decisions will not have a significant impact on the US market, which produces about 80% of its gas domestically. But Europe is dependent on Russia and Algeria for more than 40% of its gas consumption. Qatar's Minister of Industry and Energy Abdullah al-Attiyah said: "I hate the name cartel. We are not a cartel". His Iranian counterpart Kazem Vaziri-Hamaneh said: "We're just here to consider our interests. There is no discussion in this meeting about a cartel. The idea of a cartel is not an issue. We're here to exchange views on technical issues and on the markets".

The Doha meeting and speculation that the GECF would create a gas body has alarmed leaders in Europe and America. EU leaders have already discussed potential responses aimed at opposing the emergence of a producers' group that would co-ordinate output and control prices. Attiyah said this was unfortunate, adding: "The West is reacting negatively. They should sit with us and discuss this with us before imposing any regulations on us or any new taxes. We should create confidence between [gas] producers and consumers and send a positive message and not blame each other". Russian Industry and Energy Minister Viktor Khristenko, who heads the new committee, said the next GECF meeting will be held in Moscow in 2008.

Concerns about creation of a gas cartel have risen following statements by Russian President Vladimir Putin and his Iranian and Venezuelan counterparts, who have all raised the notion. But Russia has appeared to backtrack, and other producers have dismissed the idea. Neither Iran nor Venezuela are net exporters of natural gas. Khristenko said: "There are a few issues [in need of discussion] - infrastructure, relations with customers and development of pricing policies". Russia, which supplies its gas by pipeline but has ambitions to create LNG projects that would enable it to export via tankers, is concerned the growing LNG trade outside its borders could impinge on its dominance of the European market. Moscow worries that other gas suppliers could beat it to the Asian market. Both Russia's projects to pump gas east via pipelines and its major Shtokman LNG venture have suffered delays.

Khristenko said details on the composition of the new committee had yet to be worked out and it would not lead to a cartel. However, Algerian Energy and Mines Minister Chakib Khelil said in the long term, gas producers were moving towards a "gas OPEC", but stressed that it would take a long time. Khelil explained: "The process [of pricing natural gas] up to now has been indexed to oil. The world has changed. Now we have lots of things people didn't talk about five years ago". Other ministers in Doha pointed out that it was far harder to set up any form of pricing cartel for gas because it was traded in long-term contracts, was linked to oil and much of the world's gas was transported regionally by pipeline rather than tanker.

Gazprom To Be World's Biggest Firm: Gazprom, the Russian gas export monopoly, aims to quadruple its market value to $1 trillion within a decade. Bloomberg on April 10 quoted Gazprom Deputy CEO Alexander Medvedev as saying: "We will reach a $1 trillion market capitalization in a period of seven to 10 years. We'd like to be the most-valued and most-capitalized company in the world".

$1 tn would be more than twice ExxonMobil's value, now the world's largest publicly traded firm at $439.6 bn, and would exceed Russia's 2006 economic output which was $975 bn. It would surpass the GDP of countries including the Netherlands, Australia and South Korea. Gazprom, the world's biggest gas producer, has more than eight times ExxonMobil's energy reserves and is seeking more. The state-run company took control last year of Shell's Sakhalin-2 venture, which is to start shipping LNG in 2008. It is developing the Shtokman project in the Arctic, Russia's largest untapped gas deposit, which will begin exporting LNG in 2014 - or by 2015/16.

Medvedev said: "I believe it's a reasonable target that we'll double our market cap" from its current $244 bn in five years. Gazprom's shares in London climbed 60% in 2006, outpacing a 36% increase for ExxonMobil. President Putin has used Gazprom, in which the government owns more than 50%, to bolster the state's control of the economy and expand Russia's influence abroad. Gazprom CEO Alexei Miller was in Doha on April 9-10. Gazprom, with 17% of the world's gas, had 184.5 bn barrels of oil equivalent in reserves as of 2004. A $1 tn figure would value those reserves at about $5.50/b. ExxonMobil had reserves of about 21 bn barrels of oil equivalent as of 2004 and 22.1 bn in 2006. The 2006 figure values ExxonMobil's reserves at almost $20/b. Steven Dashevsky, head of research at Aton Capital in Moscow, says: "Gazprom does have the potential if the management were willing to implement reforms and cost-cutting. You can see very little of what the Gazprom management has done to make the business more valuable". Gazprom, which supplies 25% of EU gas, has benefited from rising exports and higher prices for gas supplied to former Soviet republics. It plans to begin supplying East Asia in 2008 from Sakhalin.

Qatar is the world's largest LNG exporter and is to expand capacity to 77m t/y by 2010, accounting for a third of projected world supply by then. World demand for LNG in 2006 was about 158m t/y.