Australian LNG Workers Set to Strike: Global Gas Prices Could Feel the Heat

• Financial

Australia's energy sector is bracing for a jolt. Workers at two of the country's substantial liquefied natural gas (LNG) facilities have announced plans to strike from 7 September, following prolonged discussions about pay and working conditions.

The move, seen by many as a direct response to unresolved negotiations with unions, is expected to have ripple effects on global gas prices.

Disruption Down Under

Chevron, the US-based energy behemoth operating these facilities, assures the public that they are ready to face potential disruptions. "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," commented Chevron in a recent statement.

Their commitment to "maintain safe and reliable operations" comes at a time when fears of strikes have already nudged European wholesale gas prices upwards. The imminent industrial action is no small affair. The strike plan, which was accessed by the BBC, reveals that workers intend to abstain from work for up to 11 hours daily.

Though Chevron is fervently seeking solutions "in the interests of both employees and the company," the clock is ticking.

Global Gas Prices: A Delicate Balance

Saul Kavonic, an energy analyst, views the current situation with cautious optimism.

While he anticipates that the strike's initial impact on global gas prices will be contained, he also warns of potential escalations. "In the very unlikely event of a prolonged large scale supply disruption, prices could head back towards crisis levels witnessed last year," Kavonic stated.

Samantha Dart, a senior energy analyst at Goldman Sachs, recently painted a broader picture of the interconnected global gas market for the BBC. Highlighting Australia's role as a major LNG supplier to Asia, Dart noted, "When Asia doesn't have enough of it, they come and buy from the Atlantic Basin.

LNG that would otherwise just be delivered to Europe go to Asia because of that higher competition for supply." Moreover, it's crucial to recall last year's geopolitical upheavals that rattled energy markets. Russia's invasion of Ukraine resulted in skyrocketing oil and gas prices, pinching the pockets of households and businesses alike.