Workers at Chevron Corp. liquefied natural gas facilities in Australia plan to resume strikes, sending prices higher on the threat of tighter supplies as the winter heating season approaches in the Northern Hemisphere.
(Bloomberg) — Workers at Chevron Corp. liquefied natural gas facilities in Australia plan to resume strikes, sending prices higher on the threat of tighter supplies as the winter heating season approaches in the Northern Hemisphere.
Union members at Chevron’s Gorgon and Wheatstone plants voted for further industrial action after suspending stoppages last month, according to the Offshore Alliance, which represents labor groups.
Benchmark gas futures in Europe settled 5.6% higher, the most since Sept. 25.
Unions on Monday will file a new 7-day notice for the strikes, the alliance said in a Facebook post. The decision comes after unions criticized the company’s efforts to finalize an agreement on pay and conditions.
Chevron reiterated that it is “meaningfully engaged” as it continues to work with all parties to finalize the drafting process based on recommendations from the country’s labor regulator. The Gorgon and Wheatstone facilities accounted for about 7% of global LNG supply last year.
Renewed strikes revive the risk of interruptions to shipments from Australia — one of the world’s biggest exporters of the fuel — at a crucial time of year. Europe in particular is still finding its footing after last year’s energy crisis. Gas prices spiked in recent months on concerns about interruptions to Australia’s supply.
Although Europe receives almost no gas from Australia directly, its market has been sensitive to possible supply shocks. The region depends on LNG to replace Russian pipeline gas, and it would have to compete with Asian buyers for global tanker-borne fuel.
While renewed walkouts could add to uncertainty on supply, no LNG cargoes were missed during previous strikes, said SEFE Energy Ltd., a UK energy supplier, in a note.
For now, mild weather has helped to mute European demand that is already eroded by weak industrial consumption. Storage sites in the region are now almost full.
European benchmark prices closed at €38.23 a megawatt-hour on Friday. The contract still posted an 8.7% decline for the week.
–With assistance from David Stringer.
(Updates with context.)
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