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Despite the downturn APLNG delivers record payment

Business

Origin has earned a record $1.275 billion from its stake in the APLNG project in Queensland.

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The result was at the top of its forecast range, but also follows a decision by the company to write down its stake in the project by up to $770 million and slash expenditure in its coal seam gas production by $400 million.

Origin has a 37.5 per cent stake in APLNG which has been hit by an industry-wide downturn in demand.

But the company had record production for the 2020 year and recorded its 500th cargo from Curtis Island, near Gladstone.

Full-year revenue was down 5 per cent because of a slump in domestic prices.

RBC Capital Markets said Origin’s June quarter revenue of $610m was down 3 per cent quarter-on-quarter due to fewer scheduled cargoes and lower spot LNG volumes.

“Its domestic revenue of $94 million was up 14 per cent with more gas directed to short term domestic sales, in light of weak LNG spot market conditions,” RBC said.

“Overall, this result highlights our view … that APLNG has delivered strong operational performance, lowered costs and realised relatively high LNG prices.”

Origin chief executive Frank Calabria said the record dividend from APLNG demonstrated it was a world-class asset.

“In retail, we were able to pass lower wholesale costs onto our customers, which contributed to lower prices for most customers in Queensland, South Australia, NSW and the ACT,” he said.

“The pandemic has impacted natural gas and electricity demand and some residential and small to medium enterprise customers are facing financial difficulties.

“Our focus has been on supporting customers and we have extended our commitment not to disconnect those in financial distress and to waive late payment fees until October 31.”

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