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Chevron: Australia gas facilities workers to strike

Chevron oil
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From September 7, employees at two sizable liquefied natural gas (LNG) plants operated by Chevron in Australia are scheduled to strike, which might increase gas prices around the world.

It comes after several weeks of discussions with unions about wages and working conditions.

The plants’ operator, US oil behemoth Chevron, declared that it would “continue to take steps to maintain safe and reliable operations in the event of disruption at our facilities”.

European wholesale gas prices recently increased due to strike fears.

More over 5% of the LNG produced worldwide is produced at the Wheatstone and Gorgon complexes, which employ a combined 500 people.

Workers participating in the strike will be off the job for up to 11 hours each day. 

According to a Chevron spokesperson, the corporation acknowledges that employees have the right to engage in protected industrial action even though it does not think it is necessary for an agreement to be reached. It further stated that it would continue to engage in the negotiation process in order to achieve results that are advantageous to both the firm and the employees.

The Offshore Alliance, a collaboration between two unions that represent energy workers, including those employed by Chevron, stated that it had been attempting to come to terms with the business on “several key” concerns, such as salary, job security, rosters, and training standards.

Workers had been “consistently disappointed with the company’s approach to negotiations with the union and Chevron’s unwillingness to accept that an industry standard agreement should apply to the work they do for the company,” the statement continued.

Chevron hopes the strike will blow over

Saul Kavonic, an energy analyst, stated that he presently anticipates the strike to have a minimal effect on gas prices around the world.

He did, however, issue a warning that if the industrial action was intensified, energy prices may skyrocket.

In the extremely rare scenario of a protracted, widespread supply disruption, prices may return to the crisis levels seen last year.

According to Samantha Dart, senior energy analyst at Goldman Sachs, “The issue is that these Australian facilities that produce liquefied natural gas are supplying the entire Asia.”

Because of the greater supply rivalry, Asia purchases LNG from the Atlantic Basin when there is a shortage there rather than just shipping it to Europe.

Due to the surge in oil and gas prices brought on by Russia’s invasion of Ukraine last year, energy costs for homes and businesses have significantly increased.

Due to worries about a supply disruption at Chevron and another Australian LNG plant operated by Woodside Energy, wholesale gas prices in Europe spiked last week.

Woodside announced on Thursday that it had achieved a preliminary understanding with the unions that represent the workers at its North West Shelf production.

Around 10% of the LNG supply in the world is produced by the Woodside and Chevron plants collectively.

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Following the outbreak of the Ukraine War in 2022, Russia drastically reduced its natural gas exports to Europe.

As a result, prices rose globally, forcing nations to look for other energy supplies like LNG.

Australia is one of the largest LNG exporters in the world, and its exports have contributed to a reduction in energy prices worldwide.

LNG is methane, or methane blended with ethane, that has been purified of contaminants and cooled to about -160C.

As a result, the gas is converted to a liquid that can be transported in pressurized tankers.

LNG is converted back into gas at its final destination where it is used for power, heating, and cooking much like any other natural gas.