Origin Energy's deadline for whether to expand its $20 billion Australia-Pacific liquefied natural gas (APLNG) development has slipped by three months as its proposed Chinese equity partner in the project awaits government approval.
Origin had been targeting a final decision to proceed with a second processing `train' at APLNG, at Gladstone in Queensland, by the end of the current quarter but now expects that will now be likely about mid-year.
The energy producer and retailer on Thursday posted a net profit for the six months to December 31 of $794 million compared to a $136 million loss for the previous corresponding period, partly driven by a sell-down of its stake in the APLNG project to China's Sinopec.
Origin has also left the door open for further reductions in its stake in the project to help fund the second train.
Managing director Grant King said there was no issue with the time slippage.
The decision on the second train can't be made until China's Sinopec obtains Australian and Chinese government approvals for its deal, inked last month, to buy equity in APLNG.
"We are not in control of that timetable ... and we're quite confident that they (government approvals) will be achieved," Mr King told a teleconference on Thursday.
The deal will give Sinopec a 25 per cent interest in the project, which is yet to begin the first phase of production, and leave Origin with a 37.5 per cent stake, from 42 per cent currently.
Origin said proceeds from the equity sale helped drive the surge in interim profit.
The company said it was well funded for the first phase of APLNG following a big capital raising program last year, with $5.5 billion in undrawn facilities currently, but needed more funds for the expansion.
Executive director of finance and strategy Karen Moses said Origin could secure some of the additional funds it needed for the second train by selling further equity in the project, without indicating how much it could divest.
The rest would be debt funded.
"Clearly, our dilution with APLNG bringing in Sinopec brings in funding," Ms Moses said.
"Any further dilution would also do that."
Morningstar analyst Mark Taylor said Origin would probably not need to secure extra debt funding in one hit.
"You could do it in increments because the expenditure is occurring over a number of years," Mr Taylor said.
Mr King said Origin had greatly diversified its funding sources last year, so now had many options.
He said Origin expected to continue to perform strongly in the short term, while the ongoing integration of newly acquired, previously state-owned electricity assets in NSW would boost earnings in the medium term.
He said the $3.2 billion cost of the acquisition was "a lot" but made a significant contribution to a 61 per cent jump in underlying profit to $489 million.
Higher commodity prices also helped boost Origin's underlying profit.
By around 2015, strong revenues would start to flow from APLNG, Mr King said.
A fully franked interim dividend of 25 cents per share will be paid, the same as for the previous corresponding period.
Shares in Origin closed up 26 cents at $14.05.
