Chevron LNG Plant Returns To Full Production As Strikes Continue

Chevron’s Wheatstone LNG export facility in Australia has returned to full production after a fault at the plant cut output by around 25% last week, the U.S. supermajor said on Monday as strikes at its two Australian facilities escalate amid labor disagreements.

Last Thursday, LNG production at Wheatstone was reduced by 25% after a fault, the day on which trade unions escalated their strikes at the plant and the other Chevron LNG facility, Gorgon.

The fault at the Australian plant coincided with the escalation of the strikes at the Chevron facilities which collectively account for 5% of global LNG supply.

The workers have stepped up their industrial action that began earlier last week, and plan further escalations in the coming weeks.

The trade unions and the U.S. company are expected to hold talks early this week, mediated by the Fair Work Commission, an anonymous union representative told Reuters, but expressed doubt the labor dispute could be resolved during these talks. 

No change in the situation for the better is likely at least until September 22, when a labor market regulator will hear the dispute after Chevron reached out to it in an effort to force the workers to settle.

The supermajor is seeking to get a so-called “intractable bargaining” declaration from the Fair Work Commission, meaning the FWC could force workers to agree to terms proposed by Chevron.

Despite the industrial action and the fault at the Wheatstone facility, LNG exports out of Australia remain unaffected.

“There has been no change to scheduled LNG deliveries. Domestic gas facilities and supply were unaffected,” a spokesperson for Chevron wrote in an email to Reuters on Monday. 

Weak European demand and the resumption of full production at Wheatstone LNG sent the front-month futures at the Dutch TTF hub, the benchmark for Europe’s gas trading, 3% lower as of 11:38 a.m. GMT on Monday.

By Charles Kennedy for Oilprice.com

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