Union Members Authorize September Strike at Chevron Australia’s LNG Ops
The Offshore Alliance which represents workers at Chevron’s Australian LNG production and distribution facilities scheduled an unspecified industrial action for September 7 after receiving nearly unanimous support for a strike from the 500 union members working at the company’s three plants. With Chevron Australia accounting for more than five percent of global LNG production, the news of the strike sent the European market for liquified natural gas up more than 10 percent according to Reuters.
Voting for a potential strike at Chevron’s facilities began last week with the union reporting in a filing to Australia’s Fair Work Commission that 99 percent of the 450 members at Chevron’s Gorgon LNG facility and Wheatstone downstream processing plant voted at the end of last week in favor of a job action. Today, polling was completed for the Wheatstone offshore platform where all 37 union members also voted to support a job action.
Under Australian labor law, the union needs to give notice and the action could be for a set number of hours, a ban on certain functions, or a full strike. Reuters is quoting unnamed sources saying that the union plans to stop work for three hours on September 7 and then escalate the number of hours if there is not sufficient progress on the negotiations.
Chevron confirmed that it had received the notice without announcing the details of the planned action. A company spokesperson said they don’t believe a job action is necessary for an agreement to be reached. In similar negotiations, Woodside and the union had set last Wednesday as a deadline in their talks and after a marathon negotiating session reported an in-principle agreement. Chevron combined with Woodside represents a tenth of global LNG production.
“Our members are locked and loaded and ready for Protected Industrial Action,” the Offshore Alliance wrote on its social media account. “A settlement is increasingly likely to come after we ‘jam up’ Chevron’s LNG exports.” The Offshore Alliance was formed as a combination of the Maritime Union of Australia and the Australian Workers’ Union to represent the employees at the major LNG producers.
Chevron’s Gorgon facility has an annual capacity of 15.6 million metric tons. In June the company reported it had production of first gas from the Gorgon Stage Two development off the northwest coast of Western Australia which included the addition of 11 wells and accompanying offshore production pipelines and subsea structures to maintain feed gas supply for the gas processing facilities on Barrow Island. The facility is a major LNG supplier to Asia Pacific as well as Australia’s domestic supply of LNG.
Just last week, a five percent increase in capacity was announced at the domestic gas facility at the Chevron-operated Wheatstone Project near Onslow. The company completed technical enhancements and plant modifications to increase production rates. The facility handles nearly nine million metric tons of LNG annually.
The Offshore Alliance highlighted that it had reached a new agreement with three of the operators and is now concentrating on Chevron saying that “no members will be left behind in our eventual settlement of our bargaining claims,” which center on wages and working conditions. INPEX reached terms on a new agreement early in 2022, but Shell only came to terms with the union after a 76-day job action that ended last September. Woodside has said it was confident that the in-principle agreement reached last week could be finalized and the union agreed not to proceed with a job action while the agreement was completed, submitted to the membership for a vote, and sent to the Fair Work Commission for approval.
Woodside and Australian Unions Reach In-Principle Agreement on LNG Contract
Woodside Energy and its labor unions announced that they have reached an in-principle agreement for an enterprise labor agreement for the company’s liquified natural gas operations in Australia. Energy market analysts welcomed the news noting that the threatened strike against Woodside and Chevron was putting as much as 10 percent of the world’s LNG supply at risk. Negotiations are still ongoing with Chevron.
Representatives for the Australian Workers’ Union called the agreement a “huge win” for members. The contract if completed would the be first enterprise-wide agreement in decades covering both on-shore employees and the over 150 workers at Woodside’s offshore LNG platform Goodwyn Alpha, North Rankin Complex, and Angel Platform. It also marks the union’s successful negotiations with three of the four large producers in Australia.
The Offshore Alliance, which is made up of the Australian Workers’ Union and the Maritime Union of Australia, called the agreement a “positive step” saying that Woodside had made a strong offer without the unions having to proceed with their threatened industrial action. The alliance reported that the in-principle agreement came as a 15-hour meeting and at the deadline set by the union to start a countdown toward a strike. The unions had authorization to begin a strike which was expected to start as early as September 2.
“Despite the lengthy road to this point, we are relieved that Woodside has now taken a more pragmatic approach and decided to offer our members an enterprise agreement with industry-standard terms and conditions,” said AWU WA Secretary Brad Grandy. Woodside in its statement said that the agreement covered all claims related to remuneration and other terms and conditions of employment.
Union members were scheduled to meet today to review the terms of the in-principle agreement and determine next steps. Woodside said it would be working with the union to finalize the agreement which would require a union vote and approval by Australia’s Fair Work Commission. They noted that the unions had agreed not to file for an industrial action while the process is underway while the union said members would also consider withdrawing their notices.
Just four days ago, the Electrical Trades Union which was negotiating alongside the alliance said it was “gearing up to take on the giants,” referring to Woodside and Chevron. “ETU members refuse to settle for anything less than they rightfully deserve,” the union warned.
Last year, the unions held out for 76 days in a strike against Shell before reaching a new agreement. Workers at INPEX secured a deal with the union earlier in 2022.
Chevron remains the last of the majors to reach terms with the union. The Offshore Alliance members began voting to authorize a possible strike. Union members at both Chevron’s downstream services and Gorgon platform were due to return their ballots today while workers at Chevron’s Wheatstone platform were due to submit their votes on Monday, August 28.
Industry analysts are hopeful that the initial agreement with Woodside would clear the way for a similar resolution with Chevron. Traders in LNG remained cautious but the announcement from Woodside and the unions took some pressure off the market which was bracing for a potential strike.
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