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Chevron Asks Regulator to Intervene in Australia LNG Strikes

Bloomberg
Total Views: 687
September 11, 2023

By Rob Verdonck and Stephen Stapczynski (Bloomberg) — Chevron Corp. is applying to a labor regulator to help resolve its dispute with unions at liquefied natural gas sites in Australia as workers continue partial strikes.

The producer has asked the Fair Work Commission to make so-called intractable bargaining declarations for the Gorgon and Wheatstone downstream facilities, adding to a similar request already lodged in relation to the Wheatstone platform, a Chevron spokesman said. Industrial action at the operations — which supplied about 7% of the world’s LNG last year — started Friday, sending benchmark prices soaring.

The commission confirmed it received three applications from Chevron and said it would hear the cases on Tuesday.

Under new rules in force since June, parties in an employment dispute in Australia can apply to the commission for an intractable bargaining declaration after they have held negotiations for at least nine months, or under some other conditions. If granted, the commission can make a determination on terms and conditions of employment.

“Throughout the process to date, we’ve made generous, good faith offers and concessions,” the Chevron spokesperson said. “The unions are asking for terms significantly above the market.”

The partial strikes include work stoppages and bans on carrying out overtime and some other duties. Members of the Offshore Alliance, a grouping of two key unions, said they plan to stop work completely for two weeks starting Sept. 14 if no agreement is reached.

Other spot market news:

  • Bangladesh’s state-owned Rupantarita Prakritik Gas Co. is seeking an LNG cargo for Oct. 1-2 delivery

Drivers:

  • Russia’s Sakhalin-2 resumed LNG production after maintenance and is working at full capacity, Interfax reported, citing Gazprom Deputy CEO Vitaly Markelov at the Far Eastern Economic Forum in Vladivostok
  • Novatek plans to start LNG shipments from the first production train of the Arctic LNG 2 project from mid-January, deputy CEO Evgeny Ambrosov told RIA Novosti in Vladivostok
  • Russia expects to increase gas exports via the Power of Siberia pipeline to China to 30 bcm next year, compared with 22 bcm estimated for this year, Energy Minister Nikolai Shulginov said in an interview with RIA Novosti
  • European gas storage was 93.7% full on Sept. 9, above the 5-year seasonal norm
  • Estimated gas flows to US LNG export terminals on Sunday were at about 11.8 bcf/day, according to BNEF

Vessel Rates:

  • Pacific spot earnings for a 160k cubic-meter vessel were $167,250/day on Friday, up $15,000 from the previous session, according to Spark Commodities, based on assessments from LNG ship brokers
    • Atlantic spot earnings were $160,000/day, up $11,500 from the previous session: Spark
    • NOTE: Spark values calculated on a round-trip basis, including hire, ballast bonus and lump sum estimates

Futures Prices:

  • Japan-Korea Marker futures for October delivery +0.1% to $13.33/mmbtu on Friday
    • November contract +0.8% to $14.385
  • TTF futures for October delivery +5.4% to the equivalent of $10.819/mmbtu on Friday
    • November contract +2.7% to $13.878

© 2023 Bloomberg L.P.

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