Origin Energy is set to work alongside its liquefied natural gas rival, QGC, in the first sign of co-operation between companies jockeying to export LNG from Queensland.
Origin and its joint venture partner ConocoPhillips today said they had reached a gas sales agreement with British-owned QGC, which would support the development of both their multi-billion dollar projects.
QGC and Origin are among four rivals trying to cash in on the LNG by exporting the gas, but none of their projects has been approved in a final investment decision.
The QGC project is regarded as a front runner, whereas analysts say Origin’s is lagging behind, and its potential value is hardly being factored into the company's share price.
Origin, which also reported first-half net profit of $371 million this morning, said the sale to BG would help open the ‘‘export channel’’ for its gas reserves.
‘‘The transaction evidences the importance of project cooperation," the chief executive of Origin, Grant King, said in a statement.
In early trading Origin shares had gained 6 cents to $16.86.
The partnership between Origin and BG comes after the British company made a failed $13.8 billion bid for Origin in 2008, after which it brought QGC for $5.5 billion.
Today’s profit result represented a 94 per cent fall from $6.663 billion a year ago, because of large one-off payments from ConocoPhillips in the December half of 2008. Origin’s underlying profit was up 28 per cent, to $355 million.
‘‘This increase is primarily driven by reduced financing costs, reflecting lower net debt due to receipt of funds following the Australia Pacific LNG transaction, and the increase in first half underlying EBITDA (earnings before interest, tax, depreciation and amortisation),’’ the company said.
Origin will hold its interim dividend steady at 25c a share.
cyeates@smh.com.au
SMH
