Title: Potential Strikes Threaten Chevron’s LNG Production in Australia, Causing Concerns in Global Markets
Chevron’s liquefied natural gas (LNG) production facilities in Australia are facing the possibility of daily work stoppages lasting up to 10 hours next week. This potential labor dispute over pay and conditions has the potential to impact the Gorgon and Wheatstone projects, which collectively account for over 5% of global LNG capacity.
Workers at the Gorgon and Wheatstone downstream facilities have planned a series of strikes, starting with a seven-hour stoppage on September 7. The strikes are expected to escalate, with workers planning to stop work for 10 and 11 hours on September 8 and 9, respectively. Additionally, a smaller three-hour stoppage is planned at the Wheatstone production platform.
The Offshore Alliance, consisting of the Maritime Union of Australia and the Australian Workers’ Union, has stated that the industrial action will continue to escalate until Chevron meets their bargaining claim. This situation could result in significant costs for Chevron and hinder their LNG exports, as a similar strike against Shell last year cost the company approximately $1 billion in lost exports.
The announcement of the possible strikes has already caused European natural gas prices to surge, reflecting the high level of concern within the industry. However, energy analyst Saul Kavonic believes that while the work disruptions may add inefficiency to Chevron’s operations, they are unlikely to have a significant impact on global markets.
International energy companies operating in Australia often face rapidly escalating industrial actions. Australia, being the largest exporter of LNG globally, is no stranger to such disruptions. Concerns over possible strikes at Woodside and Chevron facilities have already caused extreme price volatility in global LNG markets in recent weeks.
It is important to note that the unions do have the option to cancel the strikes if their demands are met, raising the possibility of a resolution before the planned stoppages. However, until Chevron and the Offshore Alliance reach an agreement, tensions in the industry are likely to remain high.
As the labor dispute unfolds, industry observers and market participants alike will closely monitor the developments surrounding Chevron’s Australian operations, as any impact on LNG production could have significant repercussions on the global energy market.
