The noteworthy thing about the IRR of these projects is the...

The noteworthy thing about the IRR of these projects is the superior returns on Trains 3+ of all these projects. There is a great incentive for the Majors, once committing themselves to a project, to improve the scales of economy through further gas acquisitions.

However, there are some reasons why new takeover metrics should (justifiably) be lower:

- the much higher A$ means earlier takeovers were much cheaper for LNG majors.
- The extra impost of the Carbon Tax (only 50% concession for LNG projects),
- The PRRT being applied to CSG to LNG projects.

That said, the superior returns of the 3rd Trains means that any extra gas acquired to support Trains 3+ achieves a higher rate of return than the gas acquired for Trains 1 and 2.

So the Majors make more, per GJ, for gas acquired to support Train 3.

So if the Majors make more, per GJ, for Train 3, they can afford, all things being equal, to pay more per GJ for gas to support Train 3. And still make the same IRR.

Or, to put it another way, if the Majors pay the same amount per GJ as they did for earlier acquisitions to support Trains 1 and 2, they make a greater IRR on those new acquisitions.

And with the Carbon Tax creating an additional demand for domestic gas, there is all the more reason for the Majors to want to control the gas at source, (rather than have their LNG margins squeezed by rising gas prices).

Train 3 is 'The Money Train'. Make the majors pay accordingly.

Yaq

(whilst an ESG holder, I have held BOW for some time, without posting).