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Workers at Chevron’s LNG projects in Australia are set to go on strike from September 7th after the company and the representatives of its workers failed to reach an agreement on worker demands.
Workers at the downstream section of the Gorgon and Wheatstone LNG projects plan to stop work for seven hours on September 7, rising to 10 hours on the next day, and 11 hours on September 9, Reuters reported today, citing a document from the trade unions representing the workers.
Workers on the Wheatstone offshore platform plan shorter work stoppages of three hours daily beginning from September 7.
The Gorgon and Wheatstone projects together account for about 5% of global LNG production, which means that any disruption of regular operations at these projects would add upside potential to gas prices.
European gas prices already reacted with another increase to the news that Chevron is failing to reach an agreement with the worker unions. The increase was modest, at 1.9% for European prices and U.S. prices inched up by 2.6%. However, if strikes begin, there are likely to be more substantial price climbs.
The worker unions have warned Chevron that industrial action would cost it billions of dollars.
"Their stupidity is about to cost them billions in lost production and profit," the Offshore Alliance, a group of trade unions, wrote on its Facebook page last week.
Today, the group wrote that "Members will be participating in rolling stoppages, bans and limitations which will escalate each week until Chevron agrees to our bargaining claim."
The group then added that the strike is "set to cost Chevron their LNG exports as (the industrial action) starts to bite."
Woodside, the operator of Australia’s largest LNG project the North West Shelf, also risked a strike but managed to negotiate a peace with its workers.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.