Chevron LNG Workers Plan To Restart Strike Despite Ongoing Talks

Workers at Chevron’s Australian facilities are still planning to restart their industrial action even as they continue negotiating with the company.

Industrial action first began in the middle of last month at the Gorgon and Wheatstone LNG projects, after the workers’ union and Chevron failed to reach an agreement on new contract terms regarding working conditions and pay.

Chevron reached out to the Australian labor market regulator, the Fair Work Commission, to force the union to end the strike. Indeed, workers eventually agreed to drop the strike and restart negotiations.

These, it seems, have been troubled from the start, because this month the Offshore Alliance—the union representing the Gorgon and Wheatstone workers—began threatening another strike.

In the latest update on the situation, Reuters reported that the talks had prompted “angry comments” from Chevron, which has said the workers were being unreasonable. The news agency, however, cited an unnamed source as suggesting the union was not going to make concessions and Chevron would have to change its position on several issues to avoid new strikes.

"The union's decision to ignore the recommendation ... while discussions are continuing is very concerning, unreasonable and undermines the considerable progress made prior to Chevron requesting the Commission's assistance last week," a Chevron spokesperson told Reuters.

The Gorgon project has a capacity of 15.6 million tons of liquefied natural gas annually, while the Wheatstone facility can produce 8.9 million tons annually. Together, the two account for over 5% of global LNG production capacity, and any disruption or even the suggestion of disruption of supply immediately affects global LNG prices.

Right now is an especially vulnerable time for gas prices, particularly in Europe, as the reignition of violence between Israel and Hamas has prompted the shutdown of one large gas field offshore Israel, sparking fear of supply disruptions. The fear immediately pushed European gas prices higher as would any new strike action at Gorgon and Wheatstone.

By Irina Slav for Oilprice.com

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