** Origin Energy 
ORG on Friday said Australia Pacific LNG (APLNG) and China’s Sinopec 
600028 mutually agreed to reduce the LNG price for the remaining 10 years of their contract, avoiding arbitration
** Citi says that while the initial market reaction was negative, it quickly reversed and appears unwarranted in hindsight
** Oil major added that the agreement resulted in a reduction of the JCC-linked contract slope
** Brokerage estimates contract slope reduction by ~110bps to 12.5%, which ‘fairly’ reflects broader deflation in LNG contract slopes
** Slope refers to the percentage of the benchmark Japan Crude Cocktail benchmark price to which the LNG price is linked
** Adds that the final price reopener in 2030 remains at APLNG’s discretion, suggesting a potential upside catalyst
** Maintains ‘Buy’ rating and A$11.50/shr price target
** Stock up 1.4% YTD