Get all your news in one place.
100’s of premium titles.
One app.
Start reading
AAP
AAP
Business
Marion Rae

Origin Energy upgrades outlook on gas gain

Origin Energy has upgraded the outlook for its energy markets division. (Dan Peled/AAP PHOTOS) (AAP)

Origin Energy expects gas earnings to surge this year, and next, amid the global supply crunch sparked by the war in Ukraine.

The gas and electricity company on Wednesday upgraded the outlook for the energy markets division, and said higher costs for Australian electricity would push power bills higher into 2024.

Underlying earnings are forecast to surge to $500 million to $650 million in the 2023 financial year, up from earlier forecasts of $365m, Origin said in a market update.

The gains for the gas producer from high world prices will be offset by higher costs for electricity generation in Australia that will take time to flow through to residential and business customers.

"The improvement in Energy Markets underlying EBITDA (earnings before interest, taxes, depreciation, and amortisation) compared to the prior year is driven by an expected increase in natural gas gross profit," Origin said in a market update.

Electricity gross profit is expected to remain suppressed reflecting higher energy costs "only partially priced into regulated tariffs", the company said.

Origin anticipates further growth in energy earnings in FY2024 as it passes on costs to consumers.

"A higher contribution is expected from the electricity business as higher wholesale electricity prices flow through to customer tariffs," the company said.

Origin's gas exploration and production includes assets owned with partners ConocoPhillips and Sinopec in the Surat and Bowen basins in Queensland, where rain is expected to dampen output.

Origin reaffirmed Australia Pacific LNG (APLNG) production guidance but said the continued impact of unseasonal wet weather and a forecast third La Nina was likely to result in production towards the lower end of the range.

Guidance for APLNG's capital and operating costs was unchanged.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.