KUALA LUMPUR, Malaysia – Pricing linked to the movement of crude prices will remain the ‘confidence booster’ for investments in liquefied natural gas (LNG), suppliers say.

Many countries, including the Philippines, have cast on blueprint power projects that will be utilizing LNG to generate their future electricity needs. However, with limited supply that can be extracted from the Malampaya gas field, project sponsors in the country would want to resort to LNG importation.

Chevron Global Gas President John D. Gass said despite some changes in the energy market landscape, oil-linked pricing primarily for long-term LNG contracts would still be the ultimate factor to stimulate investments even in the face of extreme swings in global oil prices.

“From an investors’ standpoint, for long-term contracts of LNG, there should be no change in the linkage of LNG prices to oil,” the Chevron executive stressed.

Given the unsettling impact of the cyclical turn of the global economy, investors prefer stepping back from spot contracts, noting that many of the LNG suppliers have been hit harder with these types of deals.

Wayne A. Harms, vice president for East Region of Exxon Mobil Upstream Ventures, echoed the sentiment, saying “I’ll agree to that…it (oil-linked pricing) is still the best long-term relationship for LNG supply.”

Chevron and Exxon Mobil are both investors in the Philippine upstream oil sector. Chevron holds the other majority interest in the Malampaya project (along with another multinational giant Shell); while Exxon has just re-entered the Philippine market via its Sandakan oil/gas prospect within the Sulu basin.