LNG FUKUROKUJU is purpose built to carry LNG from the APLNG facility at Curtis Island to Kansai Electric facility in Japan.
LNG FUKUROKUJU is purpose built to carry LNG from the APLNG facility at Curtis Island to Kansai Electric facility in Japan. APLNG

APLNG 'overly stretched' Origin's resources: CEO

OUTGOING Origin Energy chief executive Grant King said the company's $25 billion investment in Australia Pacific LNG had "overly stretched" its resources.

Things may have been different if global oil prices hadn't hit historic lows like they did in January last year when oil prices fell to $26 a barrel.

But Mr King believed Origin's stake in APLNG meant the company was positioned well to meet the needs of a growing market for gas spurred on by the need for cleaner and more efficient energy supplies.

"APLNG's extensive gas resources... together with other gas resources owned by Origin, can now be connected to the growing markets for gas in the nations of the Asian region as these nations also seek to improve the reliability, affordability and sustainability of their energy supply," he said.

"We may reflect that our investment in APLNG overly stretched the resources of Origin in light of the current circumstances but the project is now complete (and) performing well ahead of expectations.

"We are confident that our investment in APLNG will be a valuable investment for our shareholders over the longer term," he said.

Origin ended up taking a 37.5% stake in its project on Curtis Island.

Having completed APLNG Train 1 and with sales from the start of the year, APLNG is operating at above nameplate capacity on Train 1 and has produced and loaded 50 cargoes to date.

Just last week APLNG Train 2 came online, which signalled the end of Bechtel's construction project in Gladstone.

Origin chairman Gordon Cairns said with the completion of APLNG Train 2 represented a significant milestone for the company and was one of the "largest energy projects ever to be undertaken in eastern Australia... representing billions of dollars of investment in local jobs, regional communities and Queensland as a whole".

Origin posted a loss of $589 million in 2015-16 and reduced its net debt by $4 billion to $9.1 billion which Mr Cairns said was in line with its targets set for 2017.

During the year the company also reduced the number of employees at Origin by 24% and announced asset sales of $484 million. Investment in APLNG contributed the most to increasing Origin's net debt to more than $14 billion last year.



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