Origin Energy ships more LNG overseas as domestic prices slump 49pc since September quarter
The shipment of LNG cargoes from Queensland to the Asian spot market has received particular attention because the three exporters are required to first offer uncontracted gas to domestic customers before exporting it overseas.
The report confirmed the impact of wet weather on APLNG production, flagged by Origin last Friday in a revision to its outlook for 2022-23 that also included an improved earnings outlook for its nuclear energy markets business.
The upgrade helped ease market concerns over the fate of a proposed $18.4 billion takeover bid for Origin from North American bid partners Brookfield and EIG, which continues a lengthy process to examine Origin’s accounts that has been complicated by the Albanian government’s move to continue. control over domestic gas prices.
Origin made no mention of the proposed takeover deal and the ongoing due diligence process in the report, which showed a 4 percent gain in electricity sales compared to the previous quarter and relatively flat gas sales volumes.
Electricity and gas spot prices fell from July to September but were higher than a year earlier, the company said, confirming figures from the Australian Energy Market Operator.
At APLNG, production from the September quarter fell 1 percent to 165.6 PJ, with Origin citing “the cumulative impact of wet weather on well access.” It confirmed Friday’s revised estimate that output at APLNG for the full year would now be between 660PJ and 680PJ, down from earlier guidance of as much as 710PJ.
APLNG revenue in the December quarter rose 15 percent from the previous three months and rose 42 percent from a year earlier to $3.18 billion, helped by an average gas sales price across exports and domestic sales of $19.72/GH, a increase of 15 per cent from the September period.
Origin said the increase in LNG’s quarterly revenue was partly due to completed maintenance work at its Curtis Island plant in Gladstone in the September quarter. Local gas sales were higher while the plant was closed for maintenance.
Origin received a cash distribution for its 27.5 percent stake in the APLNG business of $783 million for the December half.
RBC Capital Markets analyst Gordon Ramsay said he expects APLNG to continue to benefit from “elevated” global oil and LNG prices, even after the recent drop in international gas prices.
“Completion of the exclusive due diligence period for the Brookfield and EIG non-binding indicative offer of $9/share for Origin expired on January 14, and we now await a future announcement on this offer,” Mr Ramsay said.
Shares in Origin were down 1¢ at $7.47 in morning trading.
“For the December quarter, Australia Pacific LNG delivered increased revenue due to higher realized oil prices, while wet weather and an unplanned non-operational downstream outage resulted in a small decline in production,” Mr Calabria said in the report. .
“In Energy Markets, customer sales volumes for both electricity and gas increased compared to the previous corresponding quarter as Origin won new business customers.”
Origin said about 96 percent of all its retail electricity and gas customers had been transferred to its Kraken customer service platform as of December 31, which Mr. Calabria has made better customer service possible at a lower cost.
