Gas prices nudge higher after Chevron workers vote to strike at Aussie LNG sites
Gas prices nudged higher today after Chevron workers at a key liquefied natural gas plant in Australia will engage in a full-scale strike for two weeks this month.
“The Offshore Alliance is escalating protected industrial action to demonstrate that our bargaining negotiations are far from ‘intractable’,” the unions said in a Facebook post.
This is the latest escalation between Chevron and its employees at its Gorgon and Wheatstone sites in an ongoing dispute over pay and conditions.
The strike action will begin on September 14.
The extensive industrial action raises the prospect of further tightening in gas markets, with Europe and Asia both depending on Aussie supplies to meet consumption demand amid a Russian squeeze on gas flows.
There is now a higher chance both markets will have to outbid each other to secure supplies.
Prices rose 2.2 per cent on the Dutch benchmark, and 2.8 per cent on the UK benchmark, following the news that the strike action will go ahead.
The threat of strikes at Chevron follows industrial action being called off last month at rival Australian LNG facilities on the North West Shelf, which is operated by Woodside Energy.
LNG is natural gas that has been reduced to a liquid state, through a process of cooling before it is later converted back into a gas for use.
Demand for LNG is booming across the West, with Global Data predicting more ships will be carrying LNG than oil supertankers within the next five years.
Europe depended on supplies to meet its supply needs last winter, although it is expected to stave off blackouts with storage topped up at 93 per cent.
A Chevron spokesperson told Morning Wire: “We’re looking to narrow points of difference with Gorgon and Wheatstone downstream employees and their representatives through further bargaining mediated by the Fair Work Commission.”