Australian LNG Facilities Face Strike Delays Amid Ongoing Negotiations

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Australian LNG Facilities Face Strike Delays Amid Ongoing Negotiations
Australian LNG Facilities Face Strike Delays Amid Ongoing Negotiations © Getty Images News/Dan Kitwood

Two prominent liquefied natural gas (LNG) facilities in Australia find themselves at the heart of a looming labor crisis. Initially scheduled to commence on Thursday, the series of work stoppages over disputes related to pay and conditions have been postponed.

Workers at the facilities now plan to initiate their strike action at 06:00 on Friday Perth time, corresponding to 22:00 GMT on Thursday. These anticipated stoppages have created ripples in the natural gas markets, driving prices upwards.

Chevron, a US energy behemoth, operates these two facilities - Gorgon and Wheatstone plants located in Western Australia. Together, they contribute to over 5% of the global LNG capacity. The ongoing standoff between Chevron and its workforce has led to apprehensions about potential disruptions in the global energy landscape.

"We will continue to work through the bargaining process as we seek outcomes that are in the interests of both employees and the company," noted a spokesperson from Chevron Australia, emphasizing the company's commitment to finding a resolution.

Implications for the Global Energy Market

With the possibility of rolling full stoppages set for 14 September, global energy market dynamics could be significantly affected. According to Mr. Kavonic, "In the unlikely event the situation escalates to full stoppages, then around 6% of global supply would come offline.

This could see prices spiking if the strikes prolong into the northern hemisphere winter." However, not all experts predict a protracted standoff. Tim Harcourt from the Institute for Public Policy and Governance at the University of Technology Sydney expressed his perspective.

"Generally, Australian disputes don't last very long because the Fair Work Commission is designed to intervene very early, ensuring we don't see the long disputes common in the USA or the UK," he stated. Yet, he also acknowledged the gravity of the situation, adding, "Given the significance of this industry and its 500-strong workforce, there could be some impact on global supply. But I believe we haven't reached that critical juncture yet."


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