Chevron begins mediation talks to avert Australia LNG strike

SYDNEY (Reuters) -Mediation talks to avert strikes at U.S. energy major Chevron’s two major liquefied natural gas (LNG) facilities in Australia began on Monday after workers rejected the company’s offer on wages and working conditions last week.

A senior member of the Fair Work Commission (FWC), Australia’s industrial umpire, will host the talks from 9 a.m.(0100 GMT) in the Western Australia state capital of Perth through this week, a schedule of hearings showed.

Reuters first reported on Friday that Chevron had filed a request for mediation with the FWC. The company bypassed unions and put its offer directly to workers, who overwhelmingly rejected.

A union alliance has said industrial action will begin on Thursday at Chevron’s Gorgon and Wheatstone projects, which account for more than 5% of global LNG production capacity, if parties cannot find a resolution.

Employees plan work stoppages of up to 11 hours in two blocks and will stop performing certain tasks until at least Sept. 14, the Offshore Alliance union said. The union group has said the stoppages could cost Chevron “billions of dollars”.

Any industrial action would disrupt Australia’s LNG exports and increase competition for the super-chilled fuel, forcing Asian buyers to outbid European buyers to attract LNG cargo. China and Japan are the top two lifters of Australian LNG, followed by South Korea and Taiwan.

Gorgon, Australia’s second-largest LNG plant, has an export capacity of 15.6 million tonnes a year and Wheatstone 8.9 million.

Australia is the world’s biggest LNG exporter and the ongoing dispute has stoked volatility in natural gas markets with players nervous about the risk of long-term disruption.

A similar dispute between the union alliance and Woodside-operated North West Shelf LNG facility, Australia’s biggest, was resolved last month after workers approved a deal.

(Reporting by Renju Jose and Lewis Jackson in Sydney; Editing by Christopher Cushing)