Australia-Pacific LNG plant revenues jump for largest shareholders Origin and ConocoPhillips

Wednesday, 31 July 2019
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Origin Energy, a shareholder in the Australia-Pacific liquefied natural gas export project in Queensland with ConocoPhillips of the US and Chinese major Sinopec, reported a year-on-year jump in the plant’s LNG revenues because of the higher effective oil price.

Origin said it received A$943 million (US$649.7M) in cash from APLNG in the past fiscal year.

The APLNG project’s full commodity revenue was up 36 percent at A$2.78Bln (US$1.91Bln) compared with A$2.05Bln in the previous year.

Origin also said its average LNG price in the quarter to the end of June was US$9.13 per million British thermal units.

Origin said its share of LNG volumes from its 37.5 percent stake in APLNG had fetched a 4 percent higher average price in the quarter compared with last year’s US$8.99 per MMBtu, though 14 percent lower than the previous 2019 quarter’s US$10.84 per MMBtu.

The APLNG plant produces almost 9 million tonnes per annum from two Trains and 7.6MTPA is contracted to Sinopec, whose formal name is China Petroleum & Chemical Corporation.

Sydney-based Origin said its share of production from the APLNG plant on Curtis Island was 799,800 tonnes in the quarter, a 12 percent rise on the 711,900 tonnes taken in the year-ago quarter.

Origin’s annual share of LNG offtake was 3.24 million tonnes, just 1 percent higher than 3.20MT it received in the previous year.

The company’s LNG revenues were 21 percent higher than the year-ago quarter at A$553.7 million compared with A$456.4M in the same three months of 2018, though 20 percent lower than the previous 2019 quarter when revenue was A$688.8M.

Origin runs two divisions, Integrated Gas, including upstream coal-seam gas for LNG, and Energy Markets, its gas and electricity retail and wholesale business.

APLNG’s production remained stable in the past year despite planned upstream maintenance outages.

“JCC (Japanese LNG) prices recovered in the June-19 quarter, largely driven by OPEC supply cuts and supply outages in Russia,” said Origin.

“Spot LNG prices continued to soften in the quarter, driven by additional supply from new projects and subdued demand growth,” it added.

LNG production decreased 4 percent compared with the previous quarter, driven by an increase in gas being directed to the domestic market.

Total fiscal-year oil and LNG hedging and trading costs for Origin amounted to A$199M

Quarterly domestic gas revenue increased by 19 percent compared with the previous quarter and revenue was up 6 percent for the fiscal year.

In Energy Markets, annual electricity volumes decreased 3 percent due to lower customer accounts and usage.

“Australia Pacific LNG continues its strong operational and financial performance,” said Origin Chief Executive Frank Calabria.

“Revenue was up 36 percent on the prior year driven by higher effective commodity prices which translated to A$943 million of cash flow to Origin,” added the CEO.

“Pleasingly a number of APLNG gas supply contracts were signed during the quarter with domestic manufacturing customers,” he stated.

Origin also expects the A$231M sale of the Ironbark gas assets to APLNG to be completed in August.

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