Origin to Stockpile Gas Supplies

Origin will stockpile its gas supplies as it looks to take advantage of expected price rises over the next few years.

The energy provider said it expected its gas supplies to become more valuable in the next few years, once production starts at massive LNG projects in Queensland.

The projects will allow Origin and other energy producers to export LNG overseas, at higher prices than it can get domestically.

“In order to benefit from this opportunity Origin will reduce its call on production from its upstream business and bank contracted gas this year and call for that gas in the following years when it is more valuable,” managing director Grant King told shareholders at the company’s annual general meeting.

Mr King said the move would result in lower earnings from its upstream business this financial year.

But he said earnings were expected to grow substantially from the 2016 financial year.

Origin’s Australia Pacific LNG is one of three major LNG projects under construction at Gladstone, on the Queensland coast, alongside Santos’s GLNG and BG Group’s QCLNG.

Mr King said production was expected to start at Australia First LNG in mid-2015, but would not have an impact on its earnings this financial year.

He said the next two years would be “transitional” for the company, thanks to the growing demand for gas from overseas.

“The outlook for growing demand for Australian gas is strong, particularly for LNG export from emerging hubs in Gladstone in Queensland, Darwin in the Northern Territory and the North West of Australia,” he said.

“Origin is well placed to access this growth through its existing acreage and has added a number of opportunities in the Cooper Basin potential shale gas positions in the Beetaloo Basin in the Northern Territory, and as I mentioned previously, in the Browse Basin in Western Australia.”

SHARE
 

Share On Stumble

Comments

 characters available
*Please refer to our comment policy before submitting
Discussions