Talks to avoid strikes at Australia’s biggest liquefied natural gas export terminal began Wednesday morning, as the threat to supply continues to rock global markets for the fuel.
(Bloomberg) — Talks to avoid strikes at Australia’s biggest liquefied natural gas export terminal began Wednesday morning, as the threat to supply continues to rock global markets for the fuel.
Woodside Energy Group Ltd. and officials representing workers at its North West Shelf LNG facility have started discussions in Perth to negotiate pay and conditions, according to people with knowledge of the matter. Talks are expected to continue until the evening.
The Offshore Alliance, a group representing two major labor unions, previously said that workers will take strike action early as Sept. 2 if a deal isn’t reached on Wednesday.
The risk of disruptions to LNG exports from Australia, one of the world’s biggest producers, has sent Asian and European prices surging this month. Strikes at facilities owned by Woodside and Chevron Corp., which is facing similar labor action, may put as much as 10% of global LNG supply at risk just as the Northern Hemisphere prepares for winter.
Unions have begun balloting members on potential walkouts at some of Chevron’s LNG facilities and will likely be finished by early next week. The energy company said on Wednesday that it had proposed a new agreement for its employees on the Gorgon and Wheatstone onshore gas platforms, without elaborating on the details.
Read More: European Gas Surges on Australia LNG Talks and Norway Outages
There’s been an “overreaction globally” to possible strikes, and North Asian LNG inventories are “quite high,” Zoe Yujnovich, head of Shell Plc’s integrated gas and upstream business, told reporters Wednesday.
Asian LNG buyers are holding back purchases and requesting looser delivery terms to avoid any potential impact. It’s unclear how long it would take for any strike action to materially affect exports.
“We are making good progress” in discussions, Woodside’s Chief Executive Officer Meg O’Neill said on Tuesday, noting that an agreement would have to cover broader employment arrangements, and it isn’t as simple as just negotiating pay.
The pay disputes come as Woodside, Australia’s biggest oil and gas producer, said on Tuesday that first-half profit rose as record output offset a downturn in prices.
To read a timeline of key dates in the dispute, click here.
Other LNG spot market news:
- Indian Oil purchased an LNG cargo on a DES basis for Sept. 15-Oct. 5 delivery to the Ennore terminal
- Utility Tohoku Electric Power Co. is seeking to buy one LNG cargo for October delivery into Japan
- India’s Gujarat State Petroleum Corp. is requesting to buy one cargo for October delivery into the Dahej terminal
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