Chevron LNG Workers Drop Plans For New Strike

The union representing workers at Chevron’s Gorgon and Wheatstone LNG projects has dropped plans for another strike after agreeing with the company on pay and working conditions.

Earlier this week, the Offshore Alliance said a strike had been called for on Thursday in case negotiations with Chevron failed to yield a mutually acceptable result.

Still, the risk of another strike remains.

"We hope this can now be put to rest but if Chevron tries to alter the deal again our members will obviously have no choice but to consider taking protected industrial action," said Brad Gandy, a spokesman for the union, as quoted by Reuters.

Credit Suisse director Saul Kavonic, who covers oil and gas for the banks’ Australian team, said that the issues dividing the negotiating parties had been relatively minor, so agreement was not hard to come by. The risk only arose because trust had broken down between the parties, and emotions can run high by some of the individuals involved," Kavonic told Reuters.

Workers at the Gorgon and Wheatstone facilities first went on strike in September, after failing to agree to new pay and working conditions terms with Chevron. Workers at a Woodside LNG project also threatened to strike but the company managed to strike a deal and avert the industrial action at Australia’s biggest LNG production site.

Chevron ran into problems doing the same, eventually resorting to asking for help from the country’s labor market regulator, the Fair Work Commission. The commission could order the workers to stop striking but it did not get to that.

Woodside’s North West Shelf, the largest LNG production project in Australia, has a capacity of 16.9 million tons annually, followed by Chevron’s Gorgon, which has a capacity of 15.6 million tons. Wheatstone can produce 8.9 million tons of LNG annually. Together, the three produce about 40 million tons of LNG per year.

By Irina Slav for Oilprice.com

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