Strike Risk Remains For Chevron LNG Projects In Australia

Woodside Energy may have sealed a deal with trade unions to prevent a strike of gas platform workers but Chevron has yet to get so lucky.

The supermajor actually angered the alliance of unions it is negotiating with, after it put a proposal directly to the worker vote before going through the bargaining stage, Reuters reports.

 "Their stupidity is about to cost them $billions in lost production and profit," the Offshore Alliance said in a Facebook post quoted by Reuters.

Yesterday, 99% of workers in the unions working at Chevron’s two LNG projects offshore Australia voted in favor of authorizing industrial action. That could take the form of a partial strike, with workers refusing to do certain tasks, such as loading tankers, or an all-out strike.

Earlier this week, Woodside, which operates Australia’s largest LNG production facility, managed to strike an agreement with trade unions on working conditions and remuneration. Now the workers need to ratify this to make it final.

Chevron, however, seems to be having trouble repeating that success, with the risk of a strike hanging over its head.

Earlier this month, natural gas prices in Europe and Asia spiked when the news of the potential strikes broke. They have since retreated but if actual strikes begin, they would affect a tenth of the world’s supply of liquefied natural gas and another spike could follow.

The news that Chevron is failing in its negotiations with workers could also see prices higher for a while until there is a positive development.

Woodside’s North West Shelf is the largest LNG production project in Australia, with a capacity of 16.9 million tons annually, followed by Chevron’s Gorgon, which has a capacity of 15.6 million tons. Wheatstone, also operated by Chevron, 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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