Chevron LNG Workers Reject Company Offer, Prepare For Strikes

The union representing workers at two Chevron LNG projects in Australia have rejected a company offer for new pay and conditions, and are now preparing to start industrial action next week unless an improved offer is made.

"Ballot results show that they (Chevron) are out of touch with OA members and haven’t listened to a word spoken in their discussions with members, Reps and the Offshore Alliance," the Alliance—a coalition of two trade unions representing workers in the energy industry—said in a Facebook post cited by Reuters.

Chevron, for its part, said "The vote [that rejected the offer] was part of the bargaining process and an important step which enabled employees to share their views."

The U.S. supermajor operates the Gorgon and the Wheatstone LNG projects offshore Australia. The two together account for about 5% of global LNG supply. Chevron has been locked in a pay and working conditions dispute with its workers for weeks now, while sector player Woodside, the operator of Australia’s largest LNG facility, the North West Shelf, managed to strike a deal and avert a strike.

Because of the disputes, gas prices, especially in Europe, have become extra jittery in the past couple of weeks, highlighting the precarious balance of supply and demand in liquefied natural gas. For now, Europe’s demand is relatively low, as storage is full and consumption is low in the summer months. But a strike at Gorgon and Wheatstone would no doubt lead to a temporary price spike just when Asian buyers begin to step up purchases ahead of winter.

Unless Chevron and the unions come to an agreement, workers at Gorgon and Wheatstone will begin striking on September 7 and continue until September 14, with work stoppages and bans on performing certain tasks for up to 11 hours a day.

By Irina Slav for Oilprice.com

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