Skip to main content

Origin responds to market speculation

Published by
LNG Industry,

Origin Energy Ltd has issued a statement in response to market speculation regarding the LNG sale and purchase agreement (SPA) between Australia Pacific LNG and Sinopec.

Australia Pacific LNG is an incorporated joint venture between Origin (37.5%), ConocoPhillips (37.5%) and Sinopec (25%). Australia Pacific LNG has an SPA to supply LNG equivalent to 7.6 million tpy to Sinopec.

Origin has confirmed that the SPA is structured as a take-or-pay agreement, and as such there is flexibility for Origin and ConocoPhillips, through Australia Pacific LNG, to determine the start date for supply of LNG to Sinopec under the SPA. This is intended to occur after successful commissioning to ensure that the LNG project can meet its obligations to supply cargoes under the SPA. The LNG produced during the commissioning phase will be sold under short-term contracts. Australia Pacific LNG has begun to contract these commissioning cargoes.

A statement released on Origin’s website states that whilst Sinopec's take-or-pay obligation will commence on the start date determined in accordance with the SPA, the SPA provides Sinopec with flexibility in terms of where it can take the cargoes, in order to manage the build up of key infrastructure and markets. As the SPA is structured on a Free on Board basis, any exercise of this flexibility by Sinopec would not impact Australian Pacific LNG's rights under the SPA.

The statement adds that Origin expects Sinopec to fulfil its obligations under the SPA.

The Australia Pacific LNG project remains on track for sustained production from Train 1 in 2Q16.

Edited from press release by

Read the article online at:


Embed article link: (copy the HTML code below):