Monday, August 28, 2023

Chevron’s Australian LNG Workers Set Potential Strike Date

Stephen Stapczynski and Ruth Liao
Mon, August 28, 2023 


(Bloomberg) -- Strikes at Chevron Corp.’s liquefied natural gas export plants in Australia could begin as soon as Sept. 7, threatening to disrupt global energy supply and sending fuel prices higher.

Unions gave notice that industrial action at the Gorgon and Wheatstone export plants will begin if Chevron doesn’t reach an agreement with workers, the company said Monday in an emailed statement. Chevron said it will “continue to work through the bargaining process as we seek outcomes that are in the interests of both employees and the company.”

The threat of strikes has roiled global gas markets since early August, when unions first voted for potential labor actions at three plants in Australia, and European prices jumped 10% Monday. The two Australian LNG plants operated by Chevron make up approximately 5% of global LNG supply.

Read More: Australian LNG Strike Threat Remains Focus Amid Chevron Dispute

“Members will be participating in rolling stoppages, bans and limitations which will escalate each week until Chevron agrees to our bargaining claims,” the Offshore Alliance, which includes the Australian Workers’ Union and the Maritime Union of Australia, said Tuesday on Facebook.

Setting a specific date to begin the strike ratchets up pressure on Chevron, posing a more imminent threat to its production in Australia. Woodside Energy Group Ltd. last week reached a breakthrough with unions, avoiding strikes at the nearby North West Shelf LNG complex.

Unions have been locked in a dispute with Chevron over demands around pay and other conditions.

The threat of strikes has caused jitters in European gas markets, which are still recoiling from a drastic drop in pipeline flows from Russia in the aftermath of the invasion of Ukraine. While Europe doesn’t directly import LNG from Australia, any disruption could tighten global supply and risk triggering a bidding war with Asia for spare gas shipments.

To be sure, European gas storage sites have refilled to a seasonal high, reducing the risk of a shortage. Meanwhile, a weaker recovery in Chinese LNG demand has allowed for more fuel to be shipped to Europe.

(Updates with price move in third paragraph, union comment in fourth)


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Chevron LNG workers in Australia allow union to call for strike


Mon, August 28, 2023 
By Lewis Jackson

SYDNEY, Aug 28 (Reuters) - Supplies from Chevron's liquefied natural gas facilities in major exporter Australia could be disrupted after the last batch of its workers on Monday voted to authorise their unions to take industrial action if necessary.

The Gorgon and Wheatstone facilities in Western Australia - along with Woodside Energy Group's projects in the same area - account for one-tenth of global supplies of LNG, of which Australia is the world's largest exporter.

Some 37 workers at the Wheatstone offshore platform on Monday decided in favour of industrial action, according to ballot results seen by Reuters, joining peers at another Wheatstone unit and the Gorgon facility.

The Offshore Alliance (OA), which combines the Maritime Union of Australia and Australian Workers' Union, now has the mandate, but not the obligation, to take industrial action, which could include work stoppages ranging from half an hour to 12 hours.

"All 500 OA members on the 3 Chevron facilities are backing in PIA...PIA notices will be filed shortly," the union alliance said in a Facebook post. PIA is protected industrial action.

The unions must give Chevron seven working days' notice beforehand any action.

Last week, more than 99% of the 450 or so workers at Chevron's Gorgon LNG facility, one of the country's largest, and Wheatstone's downstream processing facility voted to allow unions to call strikes if necessary.

Chevron said it was aware of the result, and continued to negotiate with the workers "as we seek outcomes that are in the interests of both employees and the company".

Earlier on Monday the company said it would put in place measures to safeguard supplies.

The potential for industrial action has provided some support for LNG prices. Energy analyst Saul Kavonic said on Friday Chevron could face some "low-level" industrial action but that was unlikely to significantly disrupt supply.

The Chevron dispute comes after Woodside resolved a similar issue at its North West Shelf LNG facility in Western Australia.

Workers at the North West Shelf offshore platforms had voted to approve strike action, but then struck an agreement with the company.

(Reporting by Lewis Jackson; Editing by Miral Fahmy)

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