China’s Sinopec secures price cut for APLNG contract

APLNG is a joint venture between US-based ConocoPhillips (47.5 percent), Australia’s Origin Energy (27.5 percent), and Sinopec (25 percent).

Origin operates APLNG’s gas fields, upstream exploration, production and pipeline system, while ConocoPhillips operates the downstream LNG export facility and the LNG export sales business.

There are two 20-year LNG export offtake agreements in place, which run until the end of 2035. One is for 7.6 mtpa to Sinopec, and the other is for 1 mtpa to Japan’s Kansai Electric.

In October 2024, Sinopec sought a price review of its long-term LNG contract.

Origin confirmed on Friday that APLNG has completed the price review for its long-term LNG supply contract with Sinopec, through mutual agreement.

According to Origin, the price review has “resulted in a reduction in the JCC-linked contract slope, which is effective from January 1, 2025.”

As a result of this change, Origin expects its share of APLNG underlying Ebitda for the second half of fiscal 2025 to be lower by A$55 million ($35.5 million).

This is based on a “realised JCC oil price of US$80/bbl and USD/AUD of 0.63 and after royalties.”

Origin noted that the LNG supply contract ends in December 2035 with one final price review in 2030, which is at APLNG’s discretion.

APLNG revenue reached about A$2.42 billion in January-March this year.

The revenue decreased from A$2.55 billion in the same quarter last year, and was down 10.6 percent compared to the prior quarter.

Origin’s share of APLNG revenue for the March quarter was A$616 million, down 10 percent compared with the prior quarter and a drop of 7 percent compared to the same quarter in 2024.