- Written by Annabelle Liang
- Business reporter
Workers at two large liquefied natural gas (LNG) terminals in Australia, operated by US energy giant Chevron, are set to go on strike from September 7, in a move that could send global prices soaring.
This comes after weeks of negotiations with unions over wages and working conditions.
Chevron told the BBC it would “continue to take the necessary steps to maintain safe and reliable operations in the event of a disruption to our facilities”.
The Wheatstone and Gorgon sites produce more than 5% of the world’s LNG.
Fears of strikes have recently led to higher wholesale gas prices in Europe.
Currently, approximately 500 workers work at Chevron’s two facilities in Western Australia.
“While we do not believe that industrial action is necessary to reach an agreement, we understand that employees have the right to take a protected industrial action,” Chevron said in a statement on Tuesday.
She added that she “will continue to work through the negotiation process as we seek to achieve results in the interest of the employees and the company.”
The Offshore Alliance – a partnership of two unions representing energy workers, including those at Chevron – said it was trying to reach agreement with the company on “several key issues” including wages, job security, rosters and training standards.
It added that workers were “consistently disappointed by the company’s approach to negotiations with the union and Chevron’s failure to apply the Industry Standards Agreement to the work they perform for the company.”
The coalition did not immediately respond to a BBC request for comment on the details of the strike plans.
“We may see work stoppages for short periods of the day, and a ban on certain businesses such as helicopter unloading. These measures create inefficiency and could lead to minor disruptions to production,” said energy analyst Saul Kavonic.
Kavonic now expects the strike to have a limited impact on global gas prices. However, he warned that energy prices could rise if industrial work intensifies.
“In the event of a large-scale supply disruption for a prolonged period, which is highly unlikely, prices may return towards the crisis levels seen last year (after the Russian invasion of Ukraine),” he added.
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 account for about 10% of the world’s LNG supply.
Russia cut natural gas supplies to Europe after the start of the Ukraine war in 2021.
This has led to higher prices around the world and prompted countries to look for alternative sources of energy, such as liquefied natural gas.
Australia is one of the world’s largest exporters of liquefied natural gas, and its supplies have helped calm global energy prices.
LNG is methane, or methane mixed with ethane, cleaned of impurities and cooled to a temperature of approximately -160°C.
This turns the gas into a liquid which can then be shipped onto tankers.
At its destination, the LNG is converted back into gas and used, like any other natural gas, for heating, cooking and power.