Australia’s Origin Energy confirmed on Friday that Australia Pacific LNG, in which Origin owns a 27.5 percent interest, has received a price review notice from Sinopec in respect of its long-term LNG supply contract.
“The contract requires the parties to use reasonable endeavors to agree on any changes required to have a contract price competitive with the prevailing market price for comparable long-term LNG contracts,” Origin said.
“In the absence of agreement, either party may refer the matter to an expert determination process for decision,” the company said.
According to Origin, any change to the contract price will be effective from January 1, 2025.
Origin said it will provide further updates to the market in accordance with its continuous disclosure obligations.
Back in April 2020, Origin said that the first price review under APLNG’s long-term contract with Sinopec was completed, with no change to the contract price.
Origin is the upstream operator of APLNG, while Sinopec owns a 25 percent share in the JV.
US energy giant ConocoPhillips has a 47.5 percent share in the APLNG project and operates the 9 mtpa LNG export facility on Curtis Island near Gladstone.
Sinopec joined APLNG in April 2011 as the foundation customer and later as part equity owner.
There are two export offtake agreements in place for LNG produced by APLNG.
These include a contract for 7.6 mtpa to JV partner Sinopec, and 1 mtpa to Japan’s Kansai Electric, both for 20 years, according to APLNG.
APLNG shipped its first LNG cargo in January 2016 after nearly five years of development and construction.
Earlier this year, APLNG shipped its 1000th LNG cargo since it started operations in 2016.
