Kazakhstan’s president proposed Thursday creating an oil and gas regulating body and exchange to service Shanghai Cooperation Organization (SCO) member states.

Speaking in Kyrgyzstan at a session of the regional group, whose members include major hydrocarbon producers, Nursultan Nazarbayev presented a draft of strategy for creating an SCO oil and gas club, an idea which has been considered since February.

"The draft Asian energy strategy envisions the establishment of an SCO energy agency, which would be a type of ’brain center’ and database, while transactions on the market for energy resources could be made through an SCO energy bourse," Nazarbayev said.

The president said that forming an oil and gas club was one of the pivotal ideas for the SCO, as the existing pipeline system linking Russia, Kazakhstan, Central Asia and China, could serve as a basis for establishing a uniform SCO market.

Russian President Vladimir Putin said expanding fuel trade cooperation could give an impetus to regional projects. "I am sure that the initiated energy dialogue and accompanying national energy strategies, as well as the establishment of an energy club, will set the priorities for our further cooperation," Putin said.

Besides Russia and Kazakhstan, the SCO comprises China, Kyrgyzstan, Tajikistan and Uzbekistan, and has Iran, India, Pakistan and Mongolia as observers.

At the talks in Bishkek on Thursday, Iranian President Mahmoud Ahmadinejad reiterated his proposal to hold a meeting of SCO energy ministers.

"I suggested last year that a meeting should be held between oil and gas ministers of SCO member states to optimize cooperation in transportation, prospecting, development and refining. As before, Iran is ready to organize such a meeting," he said.

Iran, the world’s second largest natural gas producer after Russia, proposed in January establishing an international gas cartel similar to OPEC. Plans are still at the discussions stage, but have already angered the West, in particular the United States.