Moscow, February 12:

Group of Eight (G8) finance chiefs, struggling at a weekend meeting here to avert future energy shocks, considered creating an anti-shock fund and developing a global gas market.

Russia, the world’s second-biggest oil exporter and largest natural gas producer, startled Western partners in January when it shut off gas supplies to Ukraine to force through a steep price increase.

Under pressure to show itself as a reliable energy provider, Moscow told the mightiest industrial powers that it wanted to narrow the cracks in the fractured world gas market. “Russia said it wanted to create a world gas market like the existing world oil market,” French finance minister Thierry Breton told a closing news conference after the weekend meeting in Moscow. France was ‘in favour’ of the proposal, he said.

The plan involved developing new European and Asian distribution networks, which might be funded by the EU’s long-term financing instiution, the European Investment Bank.

The scheme would also rely on the use of technology to produce and store liquefied natural gas (LNG), which is transportable by ship without the need for pipes. Russian president Vladimir Putin pushed the same theme at lunch he hosted at the end of the meetings, said Breton, adding that he “noted a desire to sell more gas.”

Russian finance minister Alexei Kudrin, who hosted the G8 financial discussions, said ministers discussed shipping gas ‘not just through pipelines but in liquified form.’ Ministers also pondered the creation of an ‘anti-shock fund’ to protect economies against sudden fluctuations in energy prices or other things like tsunamis,” Kudrin said. No further details of the proposed fund were given.

“It is obvious to all” that without new energy sources, world economic growth would be affected, he said. The industrial powers agreed to search for alternative sources including atomic energy, he said.

Georgian pipe dreams

TBILISI: An explosion that tore through a gas pipeline in Russia last month and left its neighbour Georgia out in the cold for over a week could open doors to a multi-billion-dollar business opportunity. Nestled between two ranges of the Caucasus mountains, this tiny country is surrounded by energy-rich neighbours but depends wholly on them to provide it with fuel for heat and electricity. Georgia gets most of the gas it uses to produce electricity from Russia, which recently raised prices for a host of West-leaning former Soviet states including Georgia. But that supply was cut for days when a pipeline was damaged. — AFP