Chevron offices are pictured after the U.S. government granted a six-month license allowing Chevron to increase oil production in U.S.-sanctioned Venezuela on Dec. 2, 2022, in Caracas, Venezuela. Portal/Gaby Oraa acquires license rights
- Unions are planning a total strike from September 14th if talks fail
- Short work breaks begin on Thursday
- Unions offer to repair a domestic gas plant in Wheatstone
- Union escalation could support gas prices -ING
SYDNEY, Sept 5 (Portal) – Workers at Chevron’s (CVX.N) Gorgon and Wheatstone liquefied natural gas projects in Australia are planning a two-week total strike from September 14, a union alliance said in a statement on Tuesday, escalating disputes over pay and working conditions.
Australia is the world’s largest LNG exporter and the ongoing dispute has fueled volatility in natural gas markets as traders worry about the risk of long-term disruption.
The decision to strike comes amid conciliation talks hosted by the Fair Work Commission, Australia’s industrial adjudicator. The talks began on Monday and are scheduled to take place every day this week before the union orders brief work stoppages starting Thursday.
“The Offshore Alliance is intensifying protected industrial action to show that our collective bargaining is anything but ‘hard-headed,'” the union alliance said in a Facebook post.
Chevron did not respond to a request for comment.
Continued industrial action could disrupt LNG exports and likely increase competition for the super-chilled fuel, forcing Asian buyers to outbid European buyers to attract LNG cargo.
The union’s latest move could be a sign that mediation talks are not “progressing well”, ING said.
“This should provide some support for today’s gas prices and comes at a time of ongoing maintenance work at Norway’s Troll gas field, which has seen inflows from Norway decline,” ING said in a research note.
Dutch and British gas prices were mixed on Monday as high inventories depressed near-term prices, although analysts said disruptions to Australia’s LNG exports could complicate the supply chain.
Wheatstone and Gorgon have the capacity to supply up to half of Western Australia’s total gas consumption, and on Tuesday the union alliance said some employees had offered to go on strike to help repair the domestic Wheatstone gasworks.
The Wheatstone processing plant consists of two LNG trains or liquefaction units and a domestic gas plant. The union alliance has only offered to work at the latter facility during the strikes.
Strikes “inevitable”
The union has already called for industrial action against the US energy company’s Gorgon and Wheatstone projects, which account for more than 5% of global LNG capacity, starting Thursday September 7 for seven days if the parties fail to do so can find solution.
Employees plan work breaks of up to 11 hours in several blocks and stop completing certain tasks until September 14th.
However, in its latest update, the offshore alliance said the work bans could be extended at least until the end of the month. It said Chevron was forced to finally agree to their terms, “but not before losing a few billion dollars.”
Energy analyst Saul Kavonic said Thursday’s “low-level strikes” now seemed almost inevitable and the unions’ latest move would leave them open to the possibility of escalating strikes.
“It will create inefficiencies and the risk of supply shortages increases over time, but the mediation process should resolve the issues before the strikes escalate to the point where there is a significant supply disruption,” he said.
Gorgon, Australia’s second largest LNG plant, has an export capacity of 15.6 million tonnes per year and Wheatstone of 8.9 million tonnes.
Reporting by Renju Jose in Sydney; Edited by Josie Kao, Sandra Maler, Miral Fahmy and Alexander Smith
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