Chevron workers at two major liquefied natural gas (LNG) facilities in Australia are set to strike over pay and conditions, raising fears of new turmoil in global energy markets roiled by the war in Ukraine.
The Wheatstone and Gorgon sites produce more than 5% of the world’s LNG and about 500 workers are currently employed at the two sites in Western Australia.
Workers at the two facilities plan to start a week of strikes from 7 September.
The industrial action will see workers down tools for up to 11 hours a day, according to the strike plan.
Chevron, in a statement on Tuesday, said “While we don’t believe that industrial action is necessary for agreement to be reached, we recognise employees have the right to take protected industrial action,”
“We would continue to work through the bargaining process as we seek outcomes that are in the interests of both employees and the company.”
The Offshore Alliance, which is a partnership of two unions representing energy workers, including those at Chevron, said it had been trying to reach an agreement with the company on “several key” issues including pay, job security, rosters and training standards.
It added that workers had been “consistently disappointed with the company’s approach to negotiations with the union and Chevron not accepting that an industry standard agreement should apply to the work they perform for the company”.
An Energy analyst, Saul Kavonic said he currently expects the strike to have a limited impact on global gas prices. However, he warned that energy prices could surge if the industrial action was stepped up.
“In the very unlikely event of a prolonged large scale supply disruption, prices could head back towards crisis levels witnessed last year after Russia’s invasion of Ukraine” he added.
In the last week, wholesale gas prices in Europe jumped on concerns of a disruption to supply at Chevron and another Australian LNG plant, run by Woodside Energy.
On Thursday, Woodside said it had reached an agreement in principle with unions representing workers at its North West Shelf plant.
Together, the Woodside and Chevron plants make up around 10% of the world’s supply of LNG.
Australia is one of the world’s largest LNG exporters and the Gorgon and Wheatstone facilities together account for about 7 percent of global supply.
Fears of industrial actions at the Australian facilities have led to severe price swings in global LNG markets in recent weeks, with expectations of disruption at the Gorgon and Wheatstone sites sending European gas prices higher overnight.
Chioma Kalu
Follow us on:
