Workers at Chevron’s Gorgon and Wheatstone liquefied natural gas (LNG) projects in Australia are gearing up for a significant labor strike lasting two weeks, starting from September 14, according to a union alliance announcement made on Tuesday. This move represents a marked escalation in an ongoing dispute concerning pay and conditions.
The decision to strike comes as mediation talks are in progress at the Fair Work Commission (FWC), Australia’s industrial arbitration body. These discussions began on Monday and are slated to continue throughout the week. Additionally, brief work stoppages have been called by the union, commencing this Thursday.
In a statement posted on Facebook, the union alliance, known as the Offshore Alliance, underscored their intent: “The Offshore Alliance is escalating protected industrial action to demonstrate that our bargaining negotiations are far from ‘intractable.'”
As of now, Chevron has not issued an official response to the strike announcement.
The labor dispute in Australia, the world’s largest liquefied natural gas exporter, has caused heightened volatility in natural gas markets, with concerns arising about potential long-term disruptions. Extended industrial action could impact LNG exports and elevate competition for the super-chilled fuel, possibly leading Asian buyers to outbid European counterparts for LNG cargo.
Some industry analysts suggest that the latest move by the union alliance indicates that the mediation talks may not be progressing favorably. ING, a financial institution, commented in a research note that this development is likely to bolster gas prices and coincides with ongoing maintenance work at Norway’s Troll gas field, contributing to falling flows from Norway.
The Dutch and British gas markets displayed mixed performance on Monday due to elevated storage levels, although analysts warned that any disruptions in Australian LNG exports could complicate the supply chain.
The union has already called for industrial action at Chevron’s Gorgon and Wheatstone projects, which together account for over 5% of global LNG capacity. The initial seven-day strike is planned to commence on Thursday, September 7, if no resolution is reached between the parties.
During this period, employees are set to halt work for up to 11 hours in two separate blocks and cease certain tasks until September 14. However, the Offshore Alliance’s latest update suggests that these work bans may be extended until at least the end of the month, with the intent of pressuring Chevron into agreeing to their terms, albeit at a considerable financial cost to the company.
Saul Kavonic, an energy analyst, commented that the “lower-level strikes” scheduled for Thursday appear increasingly inevitable. However, he believes that the mediation process should ideally resolve the issues before the strikes escalate to the point of causing a material disruption in supply.
The Gorgon LNG plant, Australia’s second-largest, boasts an export capacity of 15.6 million tonnes per year, while Wheatstone has a capacity of 8.9 million tonnes.
Disclaimer: This article is for informational purposes only and does not constitute financial or legal advice.
