Total CEO makes case for oil-linked LNG price

Christophe de Margerie noted the pressure that will be on LNG producers to insist on oil-linked gas contracts to safeguard long-term returns

The cost of exploration and liquefied natural gas (LNG) projects are set to rise – further stoking the conflict between producers and consumers over how to price gas, Total chief executive Christophe de Margerie said this week. In his keynote speech to the 2012 World Gas Conference, de Margerie said the complexity of projects and other inflationary factors meant upstream costs jumped 75% between 2005 to 2011, and that this would put pressure on LNG producers to insist on oil-linked gas contracts to safeguard long-term returns. “The issue is even more critical in areas of intense E&P (exploration and production) activities and scarce manpower, like Australia and Canada.  In this context o