Riding on soaring global demand for gas, Australia’s Origin Energy on Friday reported a 7% increase in third-quarter profits from its stake in the Australia Pacific LNG (APLNG) project.
Origin Energy Limited (Origin) is Australia’s largest retailer and has released its quarterly report for the period to 31 March 2023, covering the performance of its Integrated Gas and Energy Markets divisions.
The company said that Australia Pacific LNG revenues for the March quarter was 13% lower than the prior quarter due to lower realised oil prices, although it was 34% higher for the financial year to date as oil prices remain higher than the same period last year.
March quarter production was steady on the previous quarter as higher workover activity, resulting in more wells online and higher average daily operated production, was offset by a decline in non-operated production and two fewer days in the quarter.
Australia Pacific LNG realised average LNG price was $14.50/mmbtu (contracted and spot) and an average domestic price was $4.08/GJ (legacy and short-term) and it has delivered two JKM-linked spot cargoes in the quarter.
Electricity sales volumes rose 2% on the March 2022 quarter, and 8% on the prior quarter reflecting higher retail demand.
However, gas sales volumes declined 11% compared to the March 2022 quarter, driven primarily by a reduction in gas sales to generation and a reduction in business volumes.
Likewise, compared to the previous quarter, spot electricity prices declined due to increased renewable and baseload generation, and spot gas prices were lower due to a reduction in residential and industrial demand.
Origin will complete the migration of electricity and gas customers to the Kraken platform within the next few days, enabling Origin to deliver superior customer service, the company said.
Construction has been approved and major supply contracts executed for the development of Origin’s first major battery at Eraring Power Station. Stage one is for a 460 MW battery with two-hour duration and reflected a $600 million commitment.
Origin CEO Frank Calabria said that Australia Pacific LNG continues to perform well, delivering solid revenue from higher realised oil prices when compared to the same period a year ago.
“Operationally, drier weather conditions enabled higher well workover activity and this supported steady production output for the quarter. Australia Pacific LNG has continued to meet its commitment to provide Australian businesses with access to competitively priced gas, recently completing new gas sales to major business customers at the capped price of $12/GJ,” Calabria said.
“In the domestic business, it has been pleasing to see the continued stabilisation of spot electricity and gas prices following the highs of the past year,” he said.
According to him, Origin has achieved some important milestones across energy markets that are central to achieving its strategy and ambition to lead the energy transition. The migration of electricity and gas customers to Kraken will complete within the next few days, and the focus remains on bedding down the new retail operating model consistent with Origin’s ambition to deliver superior customer service.
“We have also approved construction of Origin’s first large-scale battery at Eraring, as we seek to grow renewables and storage in our portfolio. Works are set to commence shortly on the construction of the first stage of the Eraring battery, which is anticipated to come online in the final quarter of 2025,” Calabria concluded.