Origin Energy locks in coal to ease power crunch

“I’m very pleased with how the business has helped meet the energy needs of customers,” Calabria said.

Elsewhere in Origin’s operations, revenue from its gas venture in Queensland more than doubled in the past 12 months, as the fallout from Russia’s invasion of Ukraine deepens a global energy crunch and intensifies competition for oil and liquefied natural gas (LNG) cargoes.

Australia Pacific LNG, which Origin jointly owns with US-based ConocoPhillips and China’s Sinopec, reached $9.2 billion in revenue for the year. Origin’s cash distribution was $1.6 billion.

Calabria said APLNG had preformed “very strongly” at a time of high commodity prices, while boosting supplies to Australia’s domestic market.

“In addition, Australia Pacific LNG has continued to play an important role in providing secure supply to customers on Australia’s east coast, increasing gas supply to the domestic market by 4 per cent in the June 2022 quarter” Calabria said.

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Origin has not sold any uncontracted LNG cargoes on the spot market since April.

However, Harriet Kater, the head of climate at the Australasian Centre for Corporate Responsibility (ACCR), a shareholder activist group, accused Origin of prioritising “cashing in” on higher prices caused by the Russia-Ukraine war above supporting Australia’s energy needs.

“Whilst Origin appears eager to demonstrate an increase in domestic gas supply in the fourth quarter, APLNG’s financial year 2022 exports increased by 136.2 petajoules, whilst domestic supply increased by a paltry 0.6 petajoules,” Kater said.

Macquarie analyst Ian Myles said APLNG had achieved better-than-expected prices in the fourth quarter. However, he said the prospect of the federal government intervening in the gas market and considering holding back some volumes for domestic use only presented a risk to the business.

Origin on Friday also recorded a non-cash impairment of $2.2 billion for the past financial year following a $4.4 billion uplift in the value of its derivatives. Analysts described the impairment as a technical accounting issue, which did not reflect the value or performance of the underlying business.

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