Unions representing workers at two Australian LNG production plants have set a date of 7 September for industrial action sending fresh shockwaves through already volatile global gas markets.
The decision to set the date came after workers at two Chevron-operated LNG facilities — the Wheatstone and Gorgon plants — greenlighted strike action if it is required
Together these two plants account for just over 5% of global liquefaction capacity.
Chevron said: “While we don't believe that industrial action is necessary for agreement to be reached, we recognise employees have the right to take protected industrial action. We will continue to take steps to maintain safe and reliable operations in the event of disruption at our facilities.”
On Monday, workers at energy major Chevron’s Wheatstone offshore platform voted to authorise their union’s call for strikes if needed.
The action is part of a dispute over pay and conditions.
At the end of last week, nearly all the 450 workers at Chevron’s Gorgon LNG facility and the Wheatstone downstream processing plant voted to allow unions to call strikes if necessary.
The strike threats have sent jitters through the LNG market where nerves are already starting to tense ahead of the usually busy winter season. This is particularly so in Europe as it squares up to its coldest season of the year without Russian pipeline gas.
While little Australian LNG makes it to Europe, there are fears that any strike could cut shipments to Asian buyers who would then look west to replace these, pulling volumes out of the Atlantic and in doing this increasing the demand for LNG shipping.
On Friday, Spark Commodities chief executive Tim Mendelssohn said “bullish momentum” was continuing, with LNG freight rising $14,250/day in the week to reach $122,750 per day on the platform's Pacific Spark25 route.
Spot Atlantic rate estimates rose $12,750 per day week-on-week to reach $114,250 daily.
The votes by members of the Offshore Alliance — a tie-up between the Maritime Union of Australia and the Australian Workers’ Union — give the body a mandate, to take industrial action.
If the Offshore Alliance opts to move to a strike it must give Chevron seven working days’ notice.
In the past few days, operator Woodside resolved a similar dispute at its North West Shelf LNG plant in Western Australia.
European natural gas prices fell sharply on news of the resolution.
This has given rise to speculation and market hopes that the action may be averted at the other two facilities.
Chevron said on Monday that it would put measures in place to safeguard LNG supplies. “We will also continue to work through the bargaining process as we seek outcomes that are in the interests of both employees and the company.” the company said.
This article has been updated with the decision to set a date for industrial action since it was first published
