Talks between Chevron Corp. and labor unions in Australia are set to drag into Friday — keeping natural gas markets on edge — as unions said a deal to avert strikes is unlikely.
(Bloomberg) — Talks between Chevron Corp. and labor unions in Australia are set to drag into Friday — keeping natural gas markets on edge — as unions said a deal to avert strikes is unlikely.
Offshore Alliance, representing the workers, considers the package provided by Chevron underwhelming and it’s very unlikely they will reach an agreement, according to a union representative who asked not to be identified in line with policy. Chevron said it will “continue to work through the bargaining process,” adding that strikes, initially expected earlier this week, were delayed until 1 p.m. Perth time on Friday.
Gas prices in Europe — which are still volatile after last year’s historic energy crisis — jumped as much as 6.4% on the news. The continent’s benchmark contract surged 40% at one point on fears of supply disruptions from Australia, highlighting Europe’s heavy dependence on LNG after the curtailment of Russian pipeline gas flows.
Full 24-hour strikes at Chevron’s Gorgon and Wheatstone plants, which together supplied about 7% of the world’s liquefied natural gas last year, are still scheduled to run for two weeks from Sept. 14 if no resolution is reached. Another exporter, Woodside Energy Group Ltd., reached a breakthrough with unions last month at its nearby North West Shelf LNG plant.
Muted demand in Europe and Asia means the impact of walkouts could be limited initially, though any prolonged disruptions threaten to spark a bidding war between the two regions for cargoes in the peak winter season.
Europe’s supply is already impacted by the extension of maintenance at major gas fields in top exporter Norway. Flows from the country, already at multi-year lows, dropped further on Thursday, also pushing prices higher earlier in the day.
Dutch front-month futures, Europe’s gas benchmark, traded 4.7% higher at €32.55 a megawatt-hour at 4:44 p.m. in Amsterdam.
–With assistance from David Stringer and Ruth Liao.
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