SYDNEY, Aug 28 (Reuters) – Unions representing workers at Chevron‘s two major Australian liquefied natural gas (LNG) complexes have said they will take industrial action from Sept. 7, a company spokesperson said on Monday, in an ongoing dispute over pay and conditions.
The facilities account for more than 5% of global LNG production capacity, and news of the potential notice of industrial action sent European natural gas prices surging.
Concern of possible action, together with worker unrest at another major Australian producer, has caused extreme price volatility in global LNG markets in recent weeks.
“While we don’t believe that industrial action is necessary for agreement to be reached, we recognize employees have the right to take protected industrial action,” Chevron said in a statement on Monday.
“We will continue to take steps to maintain safe and reliable operations in the event of disruption at our facilities,” the company said.
Chevron workers are backed by the Offshore Alliance (OA) – which combines the Maritime Union of Australia and Australian Workers’ Union.
Industrial action could range from short work stoppages, bans on specific tasks, and even full-on strikes. A person familiar with the unions’ plans who asked not to be named said workers intend to strike for three hours on Sept. 7, and progressively increase the number of hours they will cease work.
Chevron declined to comment on the duration, or the nature of the planned action. The OA did not immediately respond to requests for comment that were made outside regular business hours.
The Dutch September natural gas contract TFMBMU3, which was trading about 3.5% higher at around 36 euros per megawatt hour (MWh) before Monday’s news, spiked by a further 2.40 euros, or 10.4% from Friday’s close, to 38.40 euros immediately.
It was trading at 37.50 euros at 0234 GMT, Intercontinental Exchange data showed.
Together with Woodside Energy Group’s projects in the same area, Chevron’s facilities account for one tenth of global supplies of LNG.
Last week, OA and Woodside resolved LNG worker disputes after negotiating higher wages and working conditions, averting industrial action.
However, OA’s talks with Chevron have failed to produce similar results. Monday’s announcement from Chevron followed a vote by 37 workers at Chevron’s Wheatstone offshore platform in favor of industrial action.
They were the last group to give their backing after more than 99% of the 450 or so workers at Chevron’s Gorgon LNG facility, one of the country’s largest, and the Wheatstone downstream processing facility allowed unions to call for industrial action.
(Reporting by Lewis Jackson in Sydney, additional reporting by Florence Tan in Singapore and Nora Buli in Amsterdam; Writing by Sudarshan Varadhan; Editing by Miral Fahmy, Barbara Lewis and Marguerita Choy)
(c) Copyright Thomson Reuters 2023.
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