MEMBERS OF THE GAS EXPORTING COUNTRIES FORUM:

ALGERIA, BOLIVIA, BRUNEI, EGYPT, EQUATORIAL GUINEA (OBS), INDONESIA, IRAN, LIBYA, MALAYSIA, NIGERIA, NORWAY (OBS), QATAR, RUSSIA, TRINIDAD & TOBAGO, UAE, VENEZUELA

THE RUSSIAN national anthem blared over the loudspeakers as dozens of oilmen and officials braved the freezing cold to watch the tanker come in, celebrating the launch of year-round oil production from Sakhalin-2, the largest oil and gas project in the world.

Yet this month's event will be dwarfed by one early next year, when the plant on the tip of Russia's far eastern island of Sakhalin begins producing liquefied natural gas, or LNG.

The advent of LNG may one day allow gas-exporting countries, which gathered in Moscow last week to create a new organisation, to act as a cartel along the lines of Opec, holding sway over prices and supply around the world.

Today, most natural gas is pumped through pipelines. Storage is difficult and producers, such as Russia's Gazprom, set prices within decades-long contracts, typically lasting 25 years.

But LNG changes all that. The gas is chilled into a liquid form, allowing it to be stored in tanks...