Chevron Australia LNG Unions Agree Deal on Eve of Strikes Resuming

Lewis Jackson and Renju Jose
Wednesday, October 18, 2023

An Australian union alliance on Wednesday agreed to endorse deals on pay and conditions at Chevron's two liquefied natural gas (LNG) facilities in Australia, ending an impasse that had led workers to threaten renewed strikes this week.

The Offshore Alliance union said it had called off strikes originally planned for Thursday at the U.S. energy major's Gorgon and Wheatstone projects in Western Australia, which supply around 6% of the world's LNG.

Australia is among the world's biggest LNG exporters and its main buyers are in Asia. Traders anticipated any cuts to supplies due to strikes would send Asian buyers competing with Europeans for cargo, spurring spot price volatility in the European gas market.

The breakthrough followed days of talks mediated by Australia's industrial arbitrator, the Fair Work Commission, to try and revive an in-principle deal reached in September that ended weeks of strikes. That fell apart earlier this month after unions said Chevron had reneged on commitments.

Workers have shown "incredible patience" with Chevron, Offshore Alliance spokesperson Brad Gandy said in a statement, blaming the company for trying to back away from the tentative deal agreed last month.

"We hope this can now be put to rest but if Chevron tries to alter the deal again our members will obviously have no choice but to consider taking protected industrial action," Gandy said.

Chevron has previously said only a small number of issues stood in the way of an agreement, including reimbursement for meals and travel. 

"There was some real compromises by Chevron at the 11th hour that enabled a deal to be re-struck and strikes withdrawn," energy analyst Saul Kavonic said.

"The outstanding negotiation items were not significant enough that they couldn't be resolved. The risk only arose because trust had broken down between the parties, and emotions can run high by some of the individuals involved."

Kavonic said the agreement would end the risks of strikes across Australia's largest offshore LNG projects. Though union talks might happen at some smaller gas facilities next year, that will not materially impact global gas supply, he said.         

The Offshore Alliance, a coalition of the Australian Workers' Union and the Maritime Union of Australia, said  workers would vote on the proposed enterprise agreements.

The ongoing disputes had roiled global gas markets for several weeks and sent LNG prices up as much as 35% in August. 

On Tuesday, Dutch and British wholesale gas prices dropped further after losses on Monday, driven by healthy flows of natural gas from Norway, while supply concerns over geopolitical tensions also eased. NG/EU

(Reuters - Reporting by Renju Jose and Lewis Jackson in Sydney, Emily Chow in Singapore and Ashitha Shivaprasad in Bengaluru; Editing by Stephen Coates)

Categories: People & Company News Energy LNG Activity Production Australia/NZ

Related Stories

CNOOC Puts Into Production New Oil Field in South China Sea

CNOOC Starts Production at Two New Oil and Gas Projects

Shell Launches Next Phase of Malaysia's Deepwater Project with First Oil Production

Shell Predicts 60% Rise in LNG Demand by 2040 with Asia Leading the Way

Tokyo Gas Enters LNG Market in Philippines

ADNOC Secures LNG Supply Deal with India's BPCL

Japan's Mitsui Eyes Alaska LNG Project

CNOOC Boosts Dongfang Gas Fields Output with New Platform Coming Online

CNOOC’s South China Sea Oil Field Goes On Stream

AI & Offshore Energy: The Higher the Stakes, the More Value AI Creates

Current News

Mitigate SCC & HE to Keep Offshore Metal Structures Ship Shape

India Stretches Bids Deadline for 13 Offshore Deep-Sea Mineral Blocks

Indonesia Awards Oil and Gas Blocks to Boost Reserves

Sapura Energy Nets $22.6M in Offshore Support Vessel Contracts

CNOOC Puts Into Production New Oil Field in South China Sea

Sunda Energy Starts Environmental Consultation for Chuditch-2 Well Drilling Plans

Pakistan’s OGDC to Start Production at ADNOC’s Offshore Block by 2027

Petrovietnam, Petronas Extend PSC for Offshore Block

Sapura Energy Scoops Close to $9M for O&M Work off Malaysia

Hanwha Ocean Marks Entry into Deepwater Drilling Market with First Drillship

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com