Chevron workers at Australia’s LNG plants to strike, raising supply fears

Chevron workers at two major liquefied natural gas (LNG) facilities in Australia are set to strike over pay and conditions, raising fears of new turmoil in global energy markets roiled by the war in Ukraine.

Workers at the Gorgon and Wheatstone facilities in Western Australia will begin rolling stoppages, bans and limitations from September 7 following “inept and incompetent” bargaining efforts by Chevron, the Offshore Alliance (OA) union said on Tuesday.

“The OA Chevron crew won’t be intimidated by an outfit which think they can exploit our resources, rip off Australian taxpayers and underpay highly skilled oil and gas workers engaged on remote major hazard facilities,” the alliance of the Maritime Union of Australia and the Australian Workers’ Union said on Facebook.

“The OA members will go one day longer and one day stronger than Chevron in our EBA [enterprise bargaining agreement] campaign.”

A Chevron spokesperson said: “While we don’t believe that industrial action is necessary for agreement to be reached, we recognise employees have the right to take protected industrial action and we will continue to take steps to maintain safe and reliable operations in the event of disruption at our facilities.”

“We will also continue to work through the bargaining process as we seek outcomes that are in the interests of both employees and the company.”

Australia is one of the world’s largest LNG exporters and the Gorgon and Wheatstone facilities together account for about 7 percent of global supply.

Fears of industrial actions at the Australian facilities have led to severe price swings in global LNG markets in recent weeks, with expectations of disruption at the Gorgon and Wheatstone sites sending European gas prices higher overnight.

Europe has replenished its gas reserves to more than 90 percent of capacity following Russia’s full-scale invasion of Ukraine, but disruption to Australia’s production could put a strain on future supplies.

The Offshore Alliance on Monday warned that it could “jam up” Chevron’s LNG exports and cost the energy giant billions of dollars in lost revenue.

Offshore Alliance and Australian energy company Woodside last week avoided industrial action after striking a deal for higher pay with workers at Australia’s largest LNG facility at North West Shelf.