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LNG workers’ unions reach deal with Woodside to avoid strike


24 Aug 2023 02:22

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24 Aug 2023 02:22

(Montel) Unions representing workers at Australia’s biggest LNG facility North West Shelf reached an agreement with producer Woodside to avert industrial action, officials said early on Thursday. 

LNG workers’ unions reach deal with Woodside to avoid strike

The two sides met on Wednesday for 15 hours for their latest round of formal negotiations after workers endorsed strike action unanimously over the weekend. 

“It’s pleasing that Woodside has made our members a strong offer without industrial action being taken,” said Brad Gandy, spokesman of the Offshore Alliance, a partnership between the Australian Workers’ Union and the Maritime Union of Australia.

The deal has to be ratified later on today by workers at the 16.9m tonnes per year facility and details of the settlement will be released then.

Without a deal, unions had to give a seven working days’ notice of industrial action and could call off the decision at any time. As such, a strike would have begun on 2 September at the earliest.

The unions obtained legal authority to call for industrial action against Woodside following a workers’ vote on 9 August, which garnered 99% support.

Woodside said in a statement it had made substantial progress in talks on Wednesday and that it “will continue to work to finalise an agreement”, adding it had not received any notices of protected industrial action.

Chevron talk

Meanwhile, Chevron told Montel on Wednesday it planned to sideline unions next week to make a separate offer to its workers at Gorgon (15.6m tonnes/year) and Wheatstone (8.9m tonnes/year) facilities.

The three LNG export terminals provide roughly 10% of global supply, or half of Australia's, which rivals the US as the world’s biggest producer of the liquid fuel. 

Strikes could affect supplies of their biggest offtakers in Japan, China, South Korea and Taiwan. These countries could then seek replacement cargoes in the spot market, tightening an already squeezed LNG market.

Europe has turned to mostly spot LNG to replace slashed Russian supplies since Moscow invaded Ukraine.

Analysts said they expected little physical impact on European LNG imports but a tighter market could drive European gas prices higher. 

Europe’s benchmark front-month gas contract at the Dutch TTF hub has spiked 18% since 9 August when workers approved strike action and settled last on Wednesday at EUR 36.79/MWh.

Please see Wheatstone LNG terminal as being 8.8m tonnes/year, instead of 16.9m tonnes/year as previously stated. See corrected copy above. 

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