Australia: Workers at Chevron gas facility to strike

On September 7, workers at two large liquefied natural gas (LNG) facilities in Australia are scheduled to go on strike, a move that could increase global prices.

It follows weeks of wage and working condition negotiations with unions. In the event of a disruption at the facilities, the US energy giant Chevron, which manages the sites, stated that it would continue to take precautions to ensure safe and reliable operations.

Recent increases in the wholesale price of gas in Europe have been attributed to disruption fears.

More than five percent of the world's LNG is produced at the Wheatstone and Gorgon sites in Western Australia, where approximately 500 people are employed.

According to a strike plan viewed by the sources, employees will cease production for up to 11 hours per day.

Chevron acknowledged on Tuesday that employees have the right to engage in protected industrial action, even though the company does not believe such action is necessary to reach an agreement.

They added that it would continue to pursue outcomes that are in the best interests of both employees and the company through the bargaining process.

The Offshore Alliance, a partnership between two unions representing energy workers, including those at Chevron, stated that it had attempted to reach an agreement with the company on "several important" issues, such as pay, job security, rosters, and training standards.

According to the report, workers were consistently dissatisfied with the company's approach to union negotiations and Chevron's refusal to acknowledge that an industry standard agreement should apply to the work they perform for the company. 

Saul Kavonic, an energy analyst, anticipates that the strike will have a limited impact on global petroleum prices.

However, he cautioned that energy prices may increase if the industrial action is intensified.

He added that in the extremely unlikely event of a prolonged large-scale supply disruption, prices could return to the crisis levels observed last year.

The invasion of Ukraine by Russia last year caused oil and gas prices to skyrocket, resulting in a significant increase in energy costs for homes and businesses.

Last week, European wholesale gas prices increased due to fears of a supply disruption at Chevron and another Australian LNG facility operated by Woodside Energy.

Woodside announced on Thursday that it had reached an agreement in principle with unions representing its North West Shelf employees.

The Woodside and Chevron facilities account for approximately 10% of the global LNG supply according to reports. 

After the outbreak of conflict in Ukraine in 2022, Russia reduced natural gas exports to Europe.

This pushed up prices globally and prompted countries to pursue alternative energy sources, such as LNG.

Australia is one of the world's largest exporters of natural gas liquids (LNG), and its supplies have contributed to reduce global energy prices.

LNG is methane or a mixture of methane and ethane that has been purified and chilled to approximately -160C.

This transforms the gas into a liquid, allowing it to be transported in pressurized containers.

At its destination, LNG is converted back into gas and used as any other natural gas would be for heating, cooking, and generating electricity.