Impact on Global LNG Supply
U.S. energy giant Chevron has reached an agreement with workers at two of its major natural-gas operations in Australia, following a recommendation by Australia’s workplace arbiter. These strikes had been affecting plants that produce around 7% of the world’s liquefied natural gas (LNG) supply, causing disruptions in global gas markets and escalating prices. It is worth noting that Australia is in direct competition with Qatar for the title of the largest exporter of LNG.
Resolution Reached
After prolonged negotiations, Australia’s Fair Work Commission proposed a solution to Chevron and its workers. Both parties have accepted the recommendation, bringing an end to the labor dispute. The Offshore Alliance union representatives confirmed that the workers have also endorsed the agreement.
Industrial Action Suspended
Chevron has announced that the unions have notified them and the Fair Work Commission of the suspension of industrial action. This development signifies a positive step towards restoring normal operations at the Gorgon and Wheatstone liquefied-natural-gas facilities. Despite the disruptions caused by the labor dispute, Chevron has managed to fulfill its supply commitments to customers both locally and globally.
Stay tuned for further updates on the resolution and its impact on the LNG market.
Escalating Strikes Cause Disruptions at Chevron Operations
Escalating strikes at Chevron’s operations have been causing disruptions, raising concerns about the competition for spot LNG cargoes. European countries, heavily dependent on the supercooled fuel since Russia’s gas supply cut-off, may face challenges due to the labor dispute.
The conflict between the workers and the company primarily revolves around wages and working conditions. Offshore Alliance, a partnership of two local unions, aims to secure an agreement that aligns with industry standards set by companies like Shell and Japan’s Inpex. However, Chevron claims that the union representatives are demanding terms that exceed the industry standard.
Fortunately, progress has been made towards resolving the dispute. The recommended deal, according to spokesperson Brad Gandy from the union coalition, includes substantial improvements in terms and conditions such as higher pay, improved rosters, and job security. The Offshore Alliance will now collaborate with Chevron to finalize the drafting of the agreement.
Following the drafting stage, the labor agreements will be put to a vote by the workers. If approved, they will then be submitted to the Fair Work Commission for official approval, as stated by the Chevron spokesperson.
