Origin Energy has signed a four-year gas deal with Australia Pacific LNG (APLNG), the company said in a May 5 statement. 

Under the deal, Origin has secured up to an additional 91 petajoules of gas from January 2022 at a Japan-Korea Marker (JKM)-linked price, with volumes to be shaped to higher demand winter months. The company said the supply deal will help alleviate a potential forecast shortfall in supply identified by the Australian Energy Market Operator (AEMO). 

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APLNG, a joint venture comprising Origin, ConocoPhillips and Sinopec, is Australia’s largest producer of coalbed methane and supplies gas to Queensland’s domestic gas market, while also processing CBM into LNG for exports. Origin owns a 37.5% stake in the business. 

Origin has also secured additional pipeline capacity under a three-year agreement with gas infrastructure company APA starting in 2023, which will allow the company to transport “significant” volumes of gas to customers in southern markets. 

“Origin has taken a major step towards securing gas supply for domestic customers, particularly in southern states, through a period in which AEMO has identified a potential shortfall for the market,” Origin executive general manager energy supply, Greg Jarvis said.

Upstream lobby group Appea also made the point that the industry was stepping in where state governments were not. “Not only have domestic gas prices consistently fallen since 2016, our industry is continuing to do the heavy lifting to provide more supply to domestic users despite some states not allowing onshore developments,” CEO Andrew McConville said.

The JKM is a daily assessment of spot prices for LNG in northeast Asia, delivery ex-ship on a month-ahead basis, published by S&P Global Platts.