Origin Energy (ASX:ORG) boosts revenue on Australia Pacific LNG project

Origin Energy (ASX:ORG) posted its September quarter results with an increase in revenue from its Australia Pacific liquefied natural gas (APLNG) project as global commodity prices rebounded.

The APLNG project in Queensland increased commodity revenue 25 per cent quarter-on-quarter and 69 per cent year-on-year, primarily driven by higher realised oil prices, offset by lower global demand and supply shortages.

“Planned downstream maintenance at Australia Pacific LNG was completed ahead of what is expected to be a busy northern hemisphere winter, and with the plant back at full capacity three JKM-linked spot cargoes have been sold into the tight Asian LNG market for delivery in the December quarter,” said CEO Frank Calabria.

Origin said APLNG fetched an average liquefied natural gas price of US$9.09 per million British thermal units and and an average domestic price of $6.79 a gigajoule. The energy giant also noted that large customers in Australia continued to enjoy good access to reasonably priced gas, with Australia Pacific LNG average prices at less than $7 a gigajoule. September quarter APLNG production and sales volume was stable compared to June quarter with a 1 per cent gain, despite planned downstream shutdown during the period. 

“The announcement to sell a 10 per cent interest in Australia Pacific LNG represents an opportunity for Origin to crystalise some of the significant value we have created in this world-class asset, while retaining a substantial shareholding and our role as upstream operator.”

Electricity sales volumes were up 3 per cent year-on-year, its retail volumes were flat with higher residential demand offset by lower usage due to solar and energy efficiency and business volumes increased 6 per cent due to net customer wins, more than offsetting Covid impacts.

“In energy markets, our electricity volumes increased with net business customer wins and higher residential usage, offsetting lower demand from business and commercial customers due to a downturn in economic activity across many sectors.”

Gas volumes declined 7 per cent year-on-year, with business volumes down 14 per cent, primarily due to expiration of contracts, retail volumes were flat and gas used in generation increased 10 per cent due to higher pool prices and to cover an outage at Eraring.

“Demonstrating Origin’s portfolio flexibility, gas was diverted to generation this quarter to take advantage of higher pool prices and to cover planned maintenance at Eraring. Eraring continues to operate flexibly and going forward we may cycle units on standby, subject to market conditions, with the ability to bring units back online if required within three to five days. This will increase overall station efficiency, leading to cost and emissions reductions.” 

Shares in Origin Energy (ASX:ORG) are trading 1.4 per cent lower at $5.05.