Higher east coast gas prices protect Origin from softer LNG

afr.com:

A jump in east coast gas prices helped offset the impact of declining LNG prices for takeover target Origin Energy, but domestic gas customers still on average paid less than half the rates struck in export markets.

Origin, which is the subject of an $18.7 billion takeover bid from two North American firms, said the average price its Australia Pacific LNG venture in Queensland got from export markets was $US12.24 per million British thermal units, while average domestic prices were $6.79 a gigajoule, which represents roughly the same volume.

Origin Energy CEO Frank Calabria said the company is proceeding to expand in renewables and storage, as the takeover is considered. Natalie Boog

APLNG’s average domestic gas price – in an east coast wholesale market now controlled by ongoing price regulation – rose 10 per cent in the June quarter from the March quarter, while its average LNG price sank 16 per cent.

In an ongoing recovery from wet weather during La Nina, production at APLNG rebounded 7 per cent in the quarter, including a new daily production record, Origin said in a quarterly report on Monday.

“Improved production has enabled Australia Pacific LNG to continue to meet the gas needs of export customers and provide a major contribution to the domestic market,” Origin chief executive Frank Calabria said.

The comments came as one of Origin’s biggest rivals in electricity and gas retailing, EnergyAustralia, told the competition regulator that blocking Origin’s takeover by Brookfield and EIG Partners could “send a negative signal to the market” given the major investment required to reach net-zero emissions.

EnergyAustralia, whose parent CLP Group has been seeking a long-term partner for the business, noted Brookfield’s