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(Bloomberg) — Australia Pacific LNG agreed to cut the price of liquefied natural gas sold under a major contract with China’s Sinopec.
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The price review resulted in a reduction in the oil-linked contract slope from Jan. 1, 2025, Origin Energy Ltd. — which holds a 27.5% stake in the export project, said Friday. The Sydney-based company sees a reduction in its underlying earnings from the Australia Pacific LNG plant of A$55 million ($35 million) in the six months through June 2025.
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Outside of the US, most of the LNG sold under long-term contracts is linked to prices for crude. Origin in October said that Sinopec had sent a price review notice to APLNG.
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China, the world’s biggest buyer of LNG, is seeking lower prices as the market faces an oversupply in the second half of this decade due to more projects coming online. The nation has also been cutting back imports of the super-chilled fuel in the past few months because of softer domestic demand and strong pipeline gas imports.
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Sinopec’s LNG supply contract ends in December 2035, with one final price review in 2030 at APLNG’s discretion, Origin said. The Chinese company is also an APLNG shareholder — with a 25% stake — while ConocoPhillips holds the remaining 47.5%. The contract started in 2016, and was for 7.6 million tons a year, making it one of the largest globally, according to the International Group of LNG Importers.
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