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By Robert Tuttle

June 11 (Bloomberg) — Russia, Iran and Qatar, holders of more than half of the world’s natural gas reserves, will meet on June 30 at the Gas Exporting Countries Forum to discuss the gas market and the appointment of a secretary general, a Qatar Petroleum official said.

Also sending officials to the meeting will be at least 11 of the forum’s 14 member countries, including Algeria, said the official, who declined to be named citing company policy. Others have yet to confirm their attendance. State-run Qatar Petroleum is organizing the event.

Global demand for natural gas will drop this year for the first time in the history of international gas markets, triggering an oversupply that may last for years, consultants Booz & Co. said today. Consumption has fallen as recessions in the U.S., Europe and Japan cut energy demand.

Members of the GECF, which was formed in 2001, adopted a charter at a meeting in Moscow in December, transforming the group from a loose, consultative body into a formal organization. The GECF also agreed to establish its headquarters in Doha, Qatar, the world’s biggest producer and exporter of liquefied natural gas.

The Organization of Petroleum Exporting Countries, which represents oil exporters, selected Abdalla El-Badri of Libya as its permanent Secretary General in December 2006. Unlike the OPEC, the GECF doesn’t set production targets.

Gas producers face the challenge of shaping a market, as 70 percent of gas is sent by pipeline to regional consumers and no global benchmark price exists on an exchange.

Local Markets

Unlike oil, most gas is sold regionally, frequently under long-term, private contracts where pricing is more opaque. Where exchange-based prices exist, they reflect local supply and demand fluctuations.

Natural gas futures on the New York Mercantile Exchange have fallen 71 percent in the past year. Gas fell 2.3 cents yesterday to settle at $3.708 per million British thermal units.

Russia, Qatar and Iran combined own 53.2 percent of the world’s gas reserves, according to BP Plc’s Statistical Review of World Energy. Russia has the world’s largest reserves, followed by Iran, Qatar, Turkmenistan and Saudi Arabia.

Russia also ranks as the world’s biggest producer of gas, followed by the U.S., Canada, Iran and Norway, according to BP. Other countries that each supply at least 2 percent of the world’s gas are Algeria, the Netherlands, Turkmenistan, the U.K., Uzbekistan, Qatar, Saudi Arabia, China, Indonesia and Malaysia.

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