Origin Energy’s gas revenue soars on strong global demand

Booming international oil and gas prices drove another huge revenue boost for Origin Energy in the final three months of 2022, but calls are now growing for more gas to be sold to the domestic market where producers face new price caps.

Origin’s APLNG venture in Queensland, the largest gas producer on the eastern seaboard, posted a 42 per cent jump in sales revenue to $3.1 billion for the December quarter compared to the same time the prior year.

The company also revealed it had supplied three spare shipments of liquefied natural gas (LNG) into the North Asian spot market, where one-off cargoes were selling for historically high average prices above $US30 per million British thermal units during the period, boosting its sales revenue.

Queensland’s LNG industry is under pressure to do more to supply the local market. Last week, the Australian Competition and Consumer Commission (ACCC) renewed warnings of possible east-coast gas supply shortages later this year, noting that LNG exporters had ample uncontracted supplies to avert a domestic shortfall, but were yet to commit enough under “firm contracts” to local buyers.

APLNG, which Origin jointly owns with US-based ConocoPhillips and China’s Sinopec, was a significant east-coast gas supplier across the quarter, selling the fuel at an average local price of $6.31 a gigajoule – less than half of its average LNG price. APLNG supplies about 30 per cent of the east-coast gas demand each year.

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“APLNG continued to be a major supplier to the domestic market, providing Australian businesses with 31.6 petajoules of gas during the quarter, at average prices well below those paid by international customers,” Origin chief executive Frank Calabria said.

However, representatives for industrial gas buyers in the manufacturing sector, where gas is needed for energy and as a feedstock, have stepped up calls for LNG giants to urgently strike more fixed-price supply deals and honour their commitments to the domestic market.

“There is clearly sufficient supply available in the market, but not all the available gas is being offered,” said Andrew Richards of the Energy Users Association of Australia, whose members include manufacturers such as Incitec Pivot, Qenos and Brickworks.