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Origin to take AUS$1.9 billion charge on LNG

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Reuters are reporting that Origin Energy increased its earnings forecast but warned on 15 February that it will book a AUS$1.89 billion charge in its half-year results, mainly on its stake in the Australia Pacific LNG APLNG (APLNG) project.

Origin raised the bottom end of its forecast range for annual underlying earnings before interest, tax, depreciation and amortisation by 3% to AUS$2.45 billion, but kept the top end of the forecast at AUS$2.62 billion.

The AUS$1.03 billion impairment charge on its 37.5% stake in the APLNG project was not a big surprise in the wake of writedowns taken by rivals on their LNG projects last year.

APLNG, operated by ConocoPhillips, is one of three coal seam gas-to-LNG plants which opened over the past two years in the northeastern state of Queensland amid a sharp slump in global oil and gas prices.

Origin also flagged it would book a AUS$578 million charge against its Browse Basin assets, which it bought for US$600 million in 2014, as it does not see them being developed anytime soon to supply ConocoPhillips' Darwin LNG plant.

Origin also flagged a AUS$170 million charge against the exploration assets which it plans to spin off in an initial public offering this year, which had been expected to fetch around AUS$1 billion.

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