Putin backs study of establishing gas cartel with Qatar

RIYADH, Saudi Arabia -- Russian President Vladimir Putin appeared to find quick success on a historic Mideast tour that saw the leader of energy-rich Russia forging oil diplomacy in Saudi Arabia and backing a natural gas cartel yesterday with neighboring Qatar.

Putin's Middle East tour comes as Washington's stature in the Gulf is slipping and Arab monarchies are busy boosting ties outside the region, particularly in Asia.

Both Qatar and Saudi Arabia have welcomed Putin despite being traditional US allies.

Putin and Qatari Emir Sheik Hamad bin Khalifa Al Thani announced that they would explore the creation of a natural gas cartel to represent the interests of producer countries to influence the global market.

"We do not reject the idea of creating a gas cartel," Putin said just hours after arriving in the tiny Gulf state after his two-day Saudi visit. "But this initiative requires more study."

Putin also said he planned to host a Mideast peace conference but gave no details.

European Union leaders have said they would stand against any effort by Russia to create a gas cartel, fearing energy prices -- and Russia's political clout -- could rise dramatically as a result. Europe gets 44 percent of its natural gas imports from Russia.

Putin said he would send a team of experts to a natural gas conference in Doha in April, where they would discuss details of building a cartel resembling the Organization of Petroleum Exporting Countries. Qatar is an OPEC member but Russia is not.

Russia and Qatar are two of the world's largest producers of natural gas, and tiny Qatar sits atop the world's single largest gas field.

In January, gas-rich Iran said it favored forming a cartel with Russia. But at the time, the head of Russia's Security Council, Igor Ivanov, said there were no plans for a cartel, only "interest in gas producers coordinating their policies in the gas sphere."

Sheik Hamad said he supported cartel talks but was unsure whether a gas cartel would be able to command OPEC-style control over gas contracts, which are typically arranged on terms as long as 25 years.

In Riyadh yesterday, Putin said he had found "common ground" between Russia and Saudi Arabia, where Saudi and Russian business leaders appeared to strengthen investment and political ties.

"Russia and Saudi Arabia are the world's leading energy producers and exporters and here it is easy for us to find common ground," Putin said in remarks in Saudi Arabia broadcast on Russian state television.

Russia, the world's second-largest oil exporter behind Saudi Arabia, represents a potential ally with considerable political strength as a member of the UN Security Council and the so-called Quartet of Middle East peace mediators.

Qatar is home to a pair of large US military bases, one of which houses the command post for operations in Iraq and Afghanistan. The Qatari government also owns the Al-Jazeera TV network.

Putin was received last night in Jordan by its monarch, King Abdullah II.