Managing director Grant King said in the company’s sustainability report this morning that the first full year of earnings and cash flow from two LNG trains at Australia Pacific LNG were expected in the 2017 financial year. Distributable cash flow of about $US1 billion ($A1.14 billion, Origin’s 37.5% share) will be generated, on average, every year thereafter.
“The step change in cash flow will allow Origin to increase shareholder distributions, maintain an investment grade credit rating and reinvest cash in growing businesses,” King said.
The vertically integrated major said it distributed $15 billion to stakeholders, a 3% decrease on the prior year, with $12.8 billion worth of net expenses the largest component, $1.1 billion to its capital providers and $783 million to its employees through wages.
The sustainability report said expenditure on APLNG had reached $21 billion by June 30, a big chunk of which was incurred on goods and services in Australia including local communities and infrastructure.
Royalties and tax expense totaled $299 million, a significant increase of $167 million on the previous year. Origin also distributed $6.7 million to communities in the form of investment programs, charitable donations and grants provided by its Origin Foundation.
King said Origin achieved a 23% improvement in its safety performance with its measure of safety, total recordable injury frequency rate, down from 6.5 to 5.
He also acknowledged that traffic had been a “key concern” in communities surrounding its CSG to LNG project which was “not a challenge we can easily solve alone”, though Australia Pacific LNG had invested in regional infrastructure upgrades.
APLNG entered into road-upgrade agreements with state and local governments in major development areas with contributions to the value of roughly $90 million; and completed a $20 million upgrade of the Miles Aerodrome to provide regular flights for project employees, removing the need for a substantial amount of road travel.
The September quarter also saw the release of the Origin-supported CSIRO study on CSG fugitive emissions on July 31 which confirmed that the emissions range was consistent with the current emission estimates for general equipment leaks, and that equipment leaks comprised only a very small proportion of greenhouse gas emissions from CSG production.
Noting that CSG provides more than 90% of Queensland’s natural gas needs and 15% of the state’s electricity generation, King said it was accepted that gas typically released less than half the carbon emissions of coal when used in a power plant to generate base load electricity.
On gender equality, Origin noted 40% of its employees were women as at June 30, especially in senior roles, with 11% of the executive management team and 27% of senior roles filled by women.
“The addition of Maxine Brenner to our board in November 2013 lifted female representation on our board to 33%,” King said. “Origin is developing work practices to accommodate a diverse workforce such as flexible work and we are pleased to see these are being adopted by men as well as women.”
