Industrial action by workers on Shell’s Prelude floating LNG (FLNG) production unit off northwest Australia has escalated with the floater still unable to discharge cargoes.
Reuters and The Western Australian reported that Shell has said it will lock out Prelude workers from Monday after they decided to extend their strike action over a pay deal by two weeks.
The major’s decision means that those currently not onboard the 3.6 million tonne per annum capacity LNG floater will not be paid while those that are on the unit will only receive pay for the time they work outside the stoppages.
The Australian paper quoted a Shell spokeswoman who said: “We have endeavoured to find every option to work around bans and stoppages and find alternate duties for our people to avoid an outcome where our staff and contractors would not be paid,” a spokeswoman said.
- Vessel type: Floating LNG unit
- LNG production capacity: 3.6 mtpa
- Condensate production capacity: 1.3 mtpa
- LPG production capacity: 0.4 mtpa
- Builder: Samsung Heavy Industries
- Topsides: Technip
- Overall length: 488 metres
- Beam: 74 metres
“However, following the production shutdown caused by the protected industrial action, we cannot continue to operate in the same way.
“As a consequence, we will be resorting to lock outs as the mechanism available under the Fair Work Act.
“Once the lock outs are in effect, people will no longer be paid if they are not mobilised to the facility.”
The latest production interruption for Shell’s giant FLNG unit comes after the major temporarily halted production and stood down most of the floater’s 350 workers following strike-related disruption which has been ongoing since 10 June.
The major said the strike action was impacting the mooring of LNG carriers alongside the unit so volumes could be discharged from Prelude.
Exports had been due to resume on 21 July until the latest extension of industrial action.
The giant FLNG producer is now sitting idle with full cargo tanks in a febrile gas-hungry market where Japan has just been seen paying a record price for a September-delivering LNG cargo.
Nippon Steel is reported to have paid around $41 per MMBtu which would value the cargo at between $132m to $135m — most expensive LNG cargo ever purchased by the country.
Prelude only restarted its LNG production in April after a five-month shutdown due to an onboard fire which started on 2 December.
Prior to this, the FLNG unit — which started exporting in June 2019 — was offline for 11 months in 2020 after an electrical trip led to a series of extensive investigations and repairs.
Those who work closely with the giant floater told TradeWinds that while the accommodation conditions onboard are good Prelude is very “over-engineered” making it complex and cramped to work on.
