Chevron Australia LNG workers commence strike. What’s next?

Workers at⁢ Chevron’s Australian LNG Projects Go on ⁢Strike

By Emily Chow and Lewis Jackson

In a major development, workers at Chevron’s ⁢liquefied natural gas (LNG) projects in Australia, responsible for 5.1% of the world’s LNG supply, have gone on ‌strike after failed mediation talks. This strike could have significant implications for the global ⁤LNG market.


What’s Next?

The unions have started with short work stoppages and bans on⁣ certain tasks, but​ they plan to escalate to a⁣ total strike within two weeks if an agreement is not reached. Workers will ⁤stop work for up ‍to 11 hours ‌per day and refuse to perform​ certain tasks ​until next Wednesday. If no deal is reached by then, they will completely stop work for two weeks.

No further talks are planned at the moment, and the⁣ unions are prepared for extensive industrial action.

Chevron has⁣ stated that it will take steps to maintain operations in‍ case of any disruptions, ⁣but has not ‌provided specific details.

What Will be ​the Impact on Price and Output?

Australia was the world’s largest LNG exporter last ‌year, and Chevron’s Gorgon and Wheatstone facilities primarily export⁤ to⁢ Japan, South Korea, China, and ⁢Taiwan. The​ National Australia⁢ Bank ‌(NAB) analyst, Baden Moore, expects⁢ some short-term spot ‌price volatility if there ‍is an ⁣unscheduled ⁣outage, but the duration of the⁢ strike will be critical.

Preliminary calculations suggest that the work stoppages until September 14th would remove around ‍95,000 tons of LNG output from the market. A full-scale strike would ​have a wider-ranging impact ⁣on output.

How Long Will the Industrial Action Last?

Industry experts believe that the risk of a prolonged strike is low,⁣ citing the short delays in starting action and the recent resolution of a similar impasse with LNG workers at Woodside Energy ⁤Group. The ‍negotiations between Woodside and ⁣the unions could provide a benchmark for finalizing terms with Chevron.

What’s at Stake for LNG Markets?

A‌ prolonged⁢ strike could disrupt LNG exports and lead to higher prices for the super-chilled fuel, ​which is used for electricity generation.​ The recent labor unrest in Australia⁢ has ⁣already caused volatility in European gas prices.

What’s the​ Disagreement?

The two sides ⁢are in disagreement over issues such as pay, job security, rosters, and rules around‌ overtime and transfers between Chevron ⁣facilities. Chevron claims that the unions’ demands go beyond industry standards, while​ the unions argue that their pay‍ demands are in line with⁤ agreements at ⁤other LNG ⁤facilities.

(Reporting by Emily Chow, Lewis⁣ Jackson and Florence Tan; Editing by Tony ‍Munroe and Miral ‌Fahmy)

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What are the potential consequences ‌of a prolonged strike ⁢at Chevron’s Australian LNG projects on global LNG prices, particularly in the Asian market?

To ‌a decrease in global LNG supply. This ‌could ‍potentially result in an ⁢increase‌ in LNG prices, particularly in the ⁢Asian market where Australia is a major supplier.

Australia’s LNG industry plays‌ a crucial role in meeting global energy demand, with Chevron’s projects ‌being a significant contributor. The Gorgon and Wheatstone facilities have a combined production ⁤capacity of 29.3 million ⁣metric tons per⁣ year, making them important​ players in the LNG‌ market.

The strike by Chevron’s workers is driven by demands for better⁣ pay and working⁤ conditions. The‍ unions have already initiated short‌ work stoppages⁤ and bans on certain tasks, indicating their determination‍ to achieve their goals. If an agreement is not reached within two weeks, they plan to escalate to a total strike, which⁣ could‍ have far-reaching consequences.

Chevron has acknowledged‌ the potential disruptions and has ​stated its intention to maintain operations. However, specific details of ​their contingency plans‍ have not been provided. It remains uncertain​ how effectively Chevron can ⁢continue production in the face of ⁢a prolonged strike.

The impact on LNG prices and output will depend ⁤on the duration of the industrial action. Short-term spot ⁤price volatility is ​expected if there are unscheduled outages, but the full-scale strike would⁤ have a more ⁤significant‌ and‌ long-lasting impact ⁤on output. Preliminary estimates suggest that the work stoppages until September 14th would ⁢remove around ⁢95,000 ⁤tons of LNG from the market. If a full-scale strike were to occur, the effects on output would be even‌ more substantial.

Industry experts believe that the risk of a prolonged strike is low, referring to the quick initiation of action and the ‍recent successful resolution of a similar situation⁢ with Woodside Energy Group. The negotiations between Woodside and the unions could serve as a benchmark for reaching a ⁣resolution with Chevron.

The implications ​for LNG markets are significant. A prolonged strike could disrupt Australia’s LNG exports, affecting global supply ‌chains and potentially‍ leading ​to shortages ​in certain regions. Given the importance of Chevron’s projects in the global LNG market, their absence would be keenly ⁣felt. The impact on⁤ prices would depend ‍on how quickly alternative supply⁤ sources can make up for the shortfall.

In ​conclusion, the strike by workers at Chevron’s Australian LNG projects has the potential‍ to significantly impact the global ‍LNG market. The ‍duration of ⁣the industrial action will determine the extent of the disruptions and the resulting effects on prices and output. It ⁢remains to be seen how Chevron and⁤ the unions will negotiate ‍and reach an agreement to avoid further escalation and potential long-term consequences for the industry.

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