Chevron Faces Potential Two-Week Strike at Australia LNG Projects Starting September 14
Posted 05/09/2023 14:08
Workers at Chevron's Gorgon and Wheatstone liquefied natural gas (LNG) projects in Australia are preparing for a total strike that could span two weeks, commencing on September 14, according to an announcement by a union alliance. This move represents a significant escalation in the ongoing disputes over pay and working conditions.
This decision comes amid mediation talks hosted by the Fair Work Commission (FWC), Australia's industrial arbitrator, which began on Monday and are scheduled to continue throughout the week. Additionally, the union has called for brief work stoppages at the projects starting from Thursday, September 7.
The union alliance, known as the Offshore Alliance, made their intentions clear in a Facebook post, stating that they are escalating protected industrial action to demonstrate that their bargaining negotiations remain unresolved.
While Chevron has not yet issued a response to the strike announcement, the situation has raised concerns in global natural gas markets. Australia is the world's largest LNG exporter, and the possibility of prolonged industrial action has sparked worries about potential disruptions in LNG exports.
The ongoing dispute could lead to increased competition for LNG supplies and result in Asian buyers outbidding European buyers to secure LNG cargo, thereby creating volatility in the market.
Some analysts suggest that the decision to escalate the strike may indicate that the mediation talks were not progressing as hoped. In light of this development, it is expected that lower-level strikes will commence on September 7 as initially planned. The Offshore Alliance mentioned in their latest update that the work bans could potentially extend until at least the end of September.
While this situation introduces inefficiencies and the risk of supply impacts over time, experts believe that the mediation process should ideally reach a resolution before strikes escalate to the point of causing significant supply disruptions.
Chevron's Gorgon and Wheatstone LNG projects, which together account for over 5% of global LNG capacity, have export capacities of 15.6 million tonnes per year and 8.9 million tonnes per year, respectively.
