Origin to invest $2b from APLNG sale in clean energy

Origin workers at APLNG plant

Origin Energy will invest $2 billion from selling down its APLNG stake in renewable assets such as battery storage, hydrogen and customer-facing technology, according to a report in The Australian Financial Review.

Chief executive office Frank Calabria said Origin would also use the cash from the sale of its 10 per cent stake in APLNG to private equity investor EIG to pay off debt, and may also return capital to shareholders.

Calabria told The Australian Financial Review the timing of the deal “felt right”, with Asian LNG prices nearing record highs after last year’s COVID-induced lows.

“We’ve been in discussions with EIG for some time … clearly the commodity markets have moved around quite a lot over the last 18 months … they all have been factoring into our thinking around the value,” he said.

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Calabria said the energy transition weighed on Origin’s decision making, and the disposal would free up cash to invest in growth opportunities, in addition to paying off debt.

“[The sale] provides financial flexibility so that we can invest in growth opportunities through the energy transition and also balance that with returns to our shareholders. That’s really the rationale.”

“We have very strong cash flows currently coming out of APLNG. The [sale] really accelerates our ability to really lean into energy transition type opportunities.”

The deal comes two months after Origin posted a bottom line loss of $2.3 billion due to subdued wholesale power prices and higher fuel costs facing its electricity business amid upheaval in the sector.

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