Case for gas as transition fuel falling apart on both economic and environmental costs (Rachel Williamson, 27 November 2023, Renew Economy)
The Australasian Centre for Corporate Responsibility (ACCR) today released financial modelling that shows Australia’s LNG projects did not generate value for shareholders.
The report, “Australia’s LNG growth wave – did it wash for shareholders?” analysed returns from Woodside’s Pluto project, Chevron’s Gorgon and Wheatstone projects, the three east coast LNG plants supplied by coal seam gas, Inpex’s Ichthys project and Shell’s Prelude.
It found these projects collectively eroded $US19 billion of shareholder value by requiring extra investment for running 35 per cent over budget and behind schedule, according to data from Rystad.
Only Gorgon has delivered a positive return to shareholders – the report did not specific how much but says it has achieved an estimated 10 per cent Internal Rate of Return.
Across the LNG industry, cost overruns and delays will see the industry deliver a negative $US1.8 billion return to shareholders, compared to
None of the projects are delivering returns that meet the cost of capital – even in the boom times, says ACCR lead analyst Alex Hillman.