Woodside's Unions Settlement Costs at Australia LNG Project Moderate - CEO

Credit: Woodside
Credit: Woodside

Woodside Energy faces increased costs following negotiations with unions at its Australian liquefied natural gas (LNG) plant, but these will have a relatively modest impact on its overall business, CEO Meg O'Neill told Reuters on Tuesday.

Last month, Woodside Energy reached an agreement with unions at Australia's largest LNG project, potentially averting a disruption to supplies, after workers' demands for better pay and conditions were met.

"There was a cost of course, but... in the grand scheme of things, there is a relatively modest impact on the total business," O'Neill told Reuters on the sidelines of the Gastech conference in Singapore, without disclosing the settlement amount. 

LNG facilities in Australia faced labor disputes last month, with about 700 workers at four facilities operated by Woodside Energy Group and U.S. major Chevron threatening industrial action over pay and conditions.  

Australia is one of the world's largest LNG exporters, along with Qatar and the U.S. Concerns about a strike spurred volatility in European gas prices NG/EU over fears the move would fuel competition between Asian and European buyers for cargoes.     

NO TIMELINE ON SUNRISE 

Development of the Greater Sunrise natural gas field on the maritime boundary between East Timor and Australia - of which Woodside is operator - has been stalled for decades due to disputes over whether the gas should go to an LNG plant in Australia, or to East Timor. 

The Sunrise joint venture includes majority owner Timor Gap, Woodside, and the Australian arm of Osaka Gas. In February, they said they would move ahead with selecting where to send the gas, with Timor Gap expecting a decision by November. 

But on Tuesday, O'Neill said there was still no timeline on the final decision. 

"The positive is we do still have strong support from both the Australian and the Timor Leste governments to move the opportunity forward. We just need to get a little bit more support at the working level," she said. 

Last month, Woodside, Australia's No.1 independent oil and gas producer, agreed to sell a 10% stake in its Scarborough LNG project in Australia to LNG Japan in a deal which also includes an offtake contract. 

"We're open to bringing other partners in with that same strategic orientation," O'Neill said. "From a balance sheet perspective, we don't need a partner. So we're going to be very selective." 


(Reuters - Reporting by Sudarshan Varadhan; writing by Katya Golubkova; editing by Jason Neely and Jan Harvey)

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