Chevron, Woodside in Talks to Avert Strikes in Australia

Source: Offshore Alliance
Source: Offshore Alliance

Chevron and Woodside Energy Group said on Thursday they are holding talks with unions to avert threatened strikes at gas facilities that together supply about 10% of the global LNG market.

Concerns over potential industrial action at three Australian LNG operations - North West Shelf, Gorgon and Wheatstone - sent European gas prices to a nearly 2-month high on Wednesday.

Any industrial action would disrupt Australia's LNG exports and increase competition for the super-chilled fuel, forcing Asian buyers to outbid European buyers to attract LNG cargoes.

Japanese and South Korean firms are the biggest buyers of LNG from the North West Shelf project, while LNG from Chevron's Gorgon and Wheatstone plants mostly goes to Japan.

About 99% of workers at offshore platforms that supply gas to the Woodside-operated North West Shelf LNG plant, Australia's biggest LNG plant, have voted in favour of a planned strike.

The Offshore Alliance union said bargaining meetings for improved pay will continue on Thursday and next Tuesday before it takes a final decision on a strike at the Woodside facilities.

"Our members at Woodside and Chevron are fighting for what they deserve, a fair and reasonable agreement as soon as possible as they are well aware of the hundreds of millions of dollars these companies will lose if protected industrial action slows exports of Australian gas," union spokesperson Brad Gandy said.

Woodside said it had engaged "actively and constructively" in the bargaining process with unions.

"Positive progress is being made and the parties have reached an in-principle agreement on a number of issues that are key to the workforce," a spokesperson said in emailed comments.

The company said it always had contingency plans to deal with potential disruptions but hoped that activating those plans will not be necessary at this stage.

The unions' push comes after a two-month fight last year against Shell at its Prelude floating liquefied natural gas (FLNG) site off northwest Australia which cost the company about $1 billion in lost exports until it reached a pay deal.

Chevron said it was reviewing the applications from the union to Australia's independent Fair Work Commission (FWC) over planned strikes at its Gorgon and Wheatstone LNG plants.

"We will continue to engage our employees and their representatives as we seek outcomes that are in the interests of both employees and the company," a spokesperson said in an emailed statement.

North West Shelf has an export capacity of 16.9 million metric tons a year. Gorgon, the country's second largest LNG plant, has capacity of 15.6 million metric tons a year and Wheatstone 8.9 million.

(Reporting by Renju Jose in Sydney; Editing by Jacqueline Wong and Sonali Paul)

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