Why?
1. Russia at this time will not surrender its energy independence.
2. Any gas cartel is bound to cheat - just like OPEC
3. Gas contracts are long term, not like oil (another reason why cheating will happen)
4. Russian domestic gas prices are really low ($47 per thousand cubic meters v the European price of $230-260 ptcm. This will change by 2011-2015). Why would any cartel underwrite Russia and at forego profits in the mean time?
5. Until LNG becomes the norm (not for a while), gas transit is defined by existing pipelines. Building pipelines costs a lot and takes a while.
So, everyone cool their heels. A gas cartel is great political talk. But the economics of such an idea is way off.....
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