Australia Pacific LNG price cut for Sinopec to hit Origin profit
Australia Pacific LNG has agreed to cut the liquefied natural gas (LNG) price on sales to China's Sinopec for the remaining 10 years on their contract, Origin Energy said on Friday.
The agreement followed a price review on their 20-year contract out to 2035, and "has resulted in a reduction in the JCC-linked contract slope, which is effective from 1 January 2025," Origin said.
The slope refers to the percentage of the benchmark Japan Crude Cocktail benchmark price to which the LNG price is linked.
Origin said the price cut would lower its earnings before income, tax, depreciation and amortization (EBITDA) from its stake in APLNG by A$55 MM ($35.39 MM) for the six months to June 2025.
China Chemical and Petroleum Corporation, commonly known as Sinopec, buys 7.6 metric MMtpy of LNG from APLNG, a project in Queensland, where it is a partner with Origin and operator ConocoPhillips.
The last price review triggered by Sinopec in 2020 did not lead to any changes. Origin said one final price review is due in 2030, which is at APLNG's discretion.
($1 = 1.5542 Australian dollars)
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