Origin announces another gas supply deal

The business remains a solid investment for those seeking income and steady growth.

Tom Richardson

Tom is a holder of the CFA Society of the UK administered Investment Management Certificate (IMC) and has more than a decade's professional experience in the investment management industry in Australia and the UK. Tom now works as a writer and editor for TMF Australia and has two easy to remember rules of investing he likes to follow. Avoid overpaying for growth stocks and avoid paying at all for stocks that are cheap for a reason. Tom prefers growth investing over value investing and says it's not rocket science, just avoid overpaying for the best returns.

Published November 28, 2013 1:53 pm AEDT

Origin Energy (ASX: ORG) announced today that it has signed a gas sales agreement with QGC Limited, to supply a total of 30 petajoules of gas through calendar years 2014 and 2015. One petajoule is equivalent to roughly 30 million cubic-metres of natural gas.

Origin has struck several big deals in the second-half of the calendar year, including one with Australia's largest natural gas pipeline owner and operator APA Group (ASX: APA). This excellent article by fellow Fool Tim McArthur also covers a recent deal Origin struck with BHP Billiton (ASX: BHP), to buy up to 432 petajoules of gas from a processing plant in Victoria.

Origin shares have been on the rise, as investors welcome the election of a Liberal government. It's seen as more favourable to big business and developers of coal seam or natural gas. At the moment Origin is part-operating Australia's largest coal seam gas project ever in central and south-west Queensland. The Australia Pacific LNG Project is due to be operational in 2015. With over $9 billion spent so far, much investor emphasis is being placed on its tracking to targets.

Foolish takeaway

With government energy policy taking a turn in its favour, sentiment on Australia's leading integrated energy company appears positive. The core energy retailing business remains solid, with the potential for the success of the natural gas projects to boost future earnings.

Automatic Renewal

By taking up this offer, you will also be enrolled in our auto-renewal program, which is our way of making your ongoing subscription easier by ensuring uninterrupted service. Don't worry, though – you're not locked in, and can cancel your auto-renewal at any time before each 'anniversary' date without question or penalty.