Australian LNG Plants Face Strike Threat, Global Gas Supply and Prices Unstable

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Chevron (CVX.N) and Woodside Energy Group (WDS.AX) are actively negotiating with unions in a bid to avert potential strikes that could disrupt pay and conditions at major liquefied natural gas (LNG) facilities. 

These facilities, responsible for approximately 10% of the global LNG market, have sparked concerns over supply disruptions and recently sent European gas prices to a nearly two-month high.

“With the implied risk and potential volatility from Australian strikes, this might signal to others that it’s time to book for Oct. onwards in anticipation of unknown pricing spikes,” said Toby Copson, the global head of trading at Trident LNG.

Strikes loom over Woodside’s North West Shelf gas platforms and Chevron’s Gorgon and Wheatstone LNG plants in Australia, causing supply uncertainties and global gas price fluctuations.

While Dutch and British gas prices eased, the threat of strikes heightened worries over Australia’s LNG exports. Disruptions may escalate LNG competition, prompting Asian buyers to outbid European rivals. Key buyers like Japanese and South Korean firms rely on Australian facilities, particularly Chevron’s Gorgon and Wheatstone plants, mainly supplying Japan.

The Offshore Alliance, a coalition of unions, revealed that most workers at Woodside’s offshore platforms had voted in favour of industrial action. The potential strikes range from minor pauses to full-blown stoppages.

Companies like Woodside and Chevron remain engaged in talks, seeking to find common ground with their employees and prevent disruptions that could impact the multi-billion-dollar LNG trade.

“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.

The Fair Work Commission oversees approving potential strikes, with Woodside’s offshore platforms already gaining approval. Meanwhile, Chevron’s situation remains pending, with a decision expected shortly.

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