Origin profits hit by Australia Pacific LNG price reduction for Sinopec

Origin Energy announced on Friday that Australia Pacific LNG had agreed to reduce the price of liquefied gas sold to Sinopec in China for the remaining ten years of their contract.

Origin stated that the agreement was reached after a price review of their 20-year contract, out to 2035. "This has resulted in an improvement in the JCC-linked contracts slope, effective as of 1 January 2025," Origin added.

The slope is the percentage of Japan Crude Cocktail benchmark prices to which LNG prices are linked.

Origin said that the price reduction would reduce its earnings before interest, taxes, depreciation, and amortization (EBITDA), from its stake in APLNG, by A$55m ($35.39m) for the half-year period ending June 2025.

Sinopec (China Chemical and Petroleum Corporation), also known as Sinopec in the industry, purchases 7.6 million tons of LNG per year from APLNG. APLNG is located in Queensland and it's a joint venture with Origin and ConocoPhillips.

Sinopec's last price review in 2020 didn't result in any changes. Origin stated that a final price review will be due in 2030. This is up to APLNG. ($1 = 1.5542 Australian dollars) (Reporting by Rishav Chatterjee in Bengaluru; Editing by Sonali Paul)

(source: Reuters)