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. Last Updated: 07/27/2016

Russian Visit to Algeria May Incite 'Gas OPEC' Theories

Industry and Energy Minister Viktor Khristenko will visit Algeria this weekend, a trip that is likely to fuel European fears that Russia plans to co-opt other major gas exporters into forming an OPEC-style cartel.

Last year, gas monopoly Gazprom upset the European Union by agreeing to a cooperation deal with Algeria's Sonatrach, raising the fear of two of Europe's top gas suppliers fixing prices.

NATO sources also said in November that the military alliance warned its members that Russia might seek to form such a club -- with members stretching from Algeria to Central Asia -- to use as a political weapon in dealings with Europe.

Russian officials have repeatedly denied that they have any plan to form a cartel, saying it is undesirable and impractical, while Gazprom says its long-term contracts make such a suggestion implausible.

Energy analysts agree that European fears are overblown.

"There's an awful lot of sound and fury in consuming countries," said Jonathan Stern, director of gas research at the Oxford Institute of Energy Studies. "There's absolutely no substance to it."

Gazprom already has 25 percent of Europe's gas market and Algeria has 10 percent, although both shares are likely to increase. Their joint market share is already as high as 72 percent in Italy.

As well as Gazprom officials, executives from state oil firm Rosneft and top Russian oil producer LUKoil will also accompany Khristenko on his visit to Algeria on Saturday and Sunday.

The Industry and Energy Ministry said Khristenko would visit Algeria's huge Hassi R'Mel gas field and a liquefied natural gas plant at the port of Arzew, as well as holding talks with Algerian officials.

"The status and potential for widening and developing the Russian-Algerian partnership in the field of energy ... will be discussed," the ministry said.