Gas exporters meeting in Qatar next week are unlikely to come up with a plan to protect against a looming euro zone led demand drop which threatens to reverse any improvement in gas sales since Japan's nuclear crisis.
They face the threat that the deepening euro zone crisis could drag industrial demand down again in one of the world's biggest gas consuming markets, with knock-on effects for gas sellers around the world.
After a grim period for the Gas Exporting Countries Forum (GECF), when many of their new plants opened just as a shale gas boom and economic slowdown slashed demand, the global gas glut has shrunk slightly since the Fukushima disaster in March.
Qatar, by far the world's largest liquefied natural gas (LNG) exporter, has benefitted from a surge in Japanese gas demand over the last few months.
That has also allowed pipeline gas export giant Russia to claw back some sales lost in a flood of Qatari LNG in Europe and taken some pressure off the group to find ways to support prices.
The heads of state of many GECF members — Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Trinidad and Tobago, Russia and Venezuela — are expected to converge in the capital of Qatar for the group's first summit on Tuesday.
"The biggest issue now affecting major gas suppliers and the GECF is what happens given the outlook for lower global economic growth, particularly should the world see a double dip triggered by ongoing Europe events," said Noel Tomnay, head of global gas analysis at Wood Mackenzie consultants in Edinburgh.
"Fukushima made a tight Pacific market tighter and helped accelerate the likely demise of Europe oversupply by a year. This has helped gas suppliers but hasn't really changed the outlook," he added. "A double dip would present a new set of contracting and pricing challenges, particularly in Europe."
Some analysts already expect European gas demand to fall sharply this year, thanks largely to warmer weather, the European Union could be even more oversupplied from 2011-2012 than in 2010.
The restart in mid October of GECF member Libya's gas export pipeline to Italy, when Italian demand is falling thanks to its deep economic problems, could dampen Russian pipeline gas sales to Europe over coming months while reducing the need for Qatari LNG.
"If material volumes of Libyan gas were to arrive in Italy during winter 2011/12, other suppliers (Russia, Norway and/or Qatar) would need to curb supply to avoid flooding the European market," French investment bank Societe Generale said in a research note.
With the exception of the first post Fukushima meeting held in June, GECF meetings the last few years have been dominated by discussion over softening the impact of a boom in unconventional gas production in North America which has forced members hoping to sell large quantities of gas to the world's biggest market to look for new customers.
Talk of coordinating supplies sparked some concern that the GECF might seek to emulate OPEC's influence on oil prices by controlling output.
But the lack of a global gas market — with prices based on diverse trading hubs in the United States and north-west Europe, oil-indexed long term contracts in continental Europe and parts of Asia — makes global supply side action near impossible.
The added complication of predominantly pipeline gas sellers like Russia, Algeria and net importer Iran being physically tied to consumers means the competing LNG and pipeline gas powers have little chance of effectively managing supply.
"We really view the exporters' forum as more a club that shares ideas and experiences rather than a cartel that can have any material effect on gas prices," said Shasha Fesharaki, senior consultant at FACTS Global Energy in Singapore.
"OPEC works because all the spare capacity sits in these countries. It's not the same for the gas markets."
In a bid to unsettle western cartel-wary consumers, Iran and Venezuela have said that the gas group should mimic OPEC. But neither OPEC oil price hawk is a significant gas exporter. Those members that do have large amounts of gas to sell have repeatedly said they have no interest in coordinating prices or exports.
Their energy ministers will meet on Nov. 13 to discuss issues facing global gas markets and producers before the heads of state sit down two days later.
The GECF is expected to issue a customary declaration after its meeting. The last meeting in Cairo in June 2011 called on consumers to commit to more long-term contracts if they want more costly infrastructure built.
Despite calls for long-term deals and increased demand in Asia, Qatar has continued to sell LNG into Europe based on hub prices, undercutting sellers like Russia and Algeria who sell under contracts linked to oil.
"The key question is whether there will be any solidarity in trying to maintain oil-linked gas prices in Europe – my answer is probably not," Jonathan Stern, director of gas research at the Oxford Institute of Energy Studies said.
"In Asia, there is no need for solidarity, because prices are high… So then one might ask: what are they going to discuss and what can they agree on?"
