Australia Pacific LNG Lowers LNG Prices for China’s Sinopec

The management of the Australia Pacific LNG (APLNG) project has agreed to lower the price of liquefied natural gas (LNG) supplied under a long-term contract with China’s Sinopec, following a request from the buyer.

On May 23, Origin Energy, which holds a 27.5% stake in Australia Pacific LNG, announced a revision of oil-linked pricing and a reduction in the overall value of the contract, effective from January 1, 2025. As a result, the Sydney-based company expects its earnings from the APLNG project to decline by $35 million in the first half of 2025.

It is worth recalling that Sinopec had officially requested a price review under its contract with APLNG back in October 2024.

China, the world’s largest LNG importer, has been pushing for lower prices amid expectations that the market may face a supply glut in the second half of the decade due to the commissioning of new projects. For several months, Beijing has reduced LNG imports due to weakening domestic demand and a significant increase in pipeline gas supplies.

Sinopec’s Australian LNG contract is set to run until December 2035, with another price review scheduled for 2030 at the discretion of APLNG, according to Origin.

Notably, Sinopec holds a 25% stake in Australia Pacific LNG, while the U.S.-based ConocoPhillips owns 47.5%. According to the International Group of LNG Importers (GIIGNL), the contract, signed in 2016 and covering 7.6 million tonnes of LNG per year, remains one of the largest in the world.