What: Origin Energy Ltd (ASX: ORG) has provided a market update on its progress on ramping-up its massive Australia Pacific LNG (APLNG) project.
In the announcement, released on Tuesday, Origin noted that it has commenced loading refrigerants to its Curtis Island LNG facility. These refrigerants are vital components in the process of cooling natural gas into a liquid.
APLNG chief executive officer Page Maxon commented that "the arrival of the refrigerants signifies a key step towards starting up the first LNG train." Maxon went on to state that "today's achievement keeps us firmly on track for first LNG export in the second half of this calendar year."
So What: Market chatter surrounding the possible need for Origin to raise funds to sure-up its balance sheet and complete the APLNG Project appears to have subsided. The steadying of the oil price decline is a further calming influence.
The closer the energy player gets to beginning exports of LNG, the more comfortable investors will feel as the prospect of a significant up-tick in cash flow for Origin moves nearer to being realised.
Now What: As I noted in this article, both Origin and Santos Ltd (ASX: STO) have been hit very hard by the decline in oil prices with their share prices down significantly. It's been a similar issue for Oil Search Limited (ASX: OSH) with its share price down 25% in the past year.
The knocked-down share prices of oil and gas energy players could be offering contrarian investors an opportunity to buy in to leading Australian energy producers at cyclically low levels. At some point in the future when the oil cycle is back at peak levels there is a good chance that today's prices will look like a great buying opportunity. There is however another investment option you should also consider…
