Australian Chevron workers’ looming strike threatens global LNG supply

Workers at two large liquefied natural gas (LNG) plants in Australia, operated by US energy giant Chevron, are set to go on strike from September 7, a move that could impact around 5 percent of global LNG volumes, thereby driving up global prices.

This follows weeks of negotiations between Offshore Alliance (OA) members at Chevron’s Western Australian gas facilities and other parties in the company over pay and working conditions.

OA members of the US supermajor’s Gorgon project, Wheatstone downstream, and Wheatstone platform facilities voted virtually unanimously in favour of more than 20 types of industrial action, including several work prohibitions and total shutdowns.

The industrial action will escalate each week until Chevron agrees to our bargaining claims, the union said via its Facebook account.

“The OA Chevron crew won’t be intimidated by an outfit which thinks they can exploit our resources, rip off Australian taxpayers and underpay highly skilled oil and gas workers engaged on remote major hazard facilities,” the Facebook Post read.

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Chevron’s Gorgon LNG project, which consists of three trains, has a nameplate capacity of 15.6 million tonnes per annum, while its Wheatstone liquefaction complex has two trains with a combined capacity of 8.9 million tpa.

According to the BBC, Chevron said it would continue to take steps to maintain safe and reliable operations in the event of disruption at our facilities.

“While we don’t believe that industrial action is necessary for agreement to be reached, we recognise employees have the right to take protected industrial action,” Chevron said in a statement on Tuesday.

It added that it would “continue to work through the bargaining process as we seek outcomes that are in the interests of both employees and the company.”

The Offshore Alliance, a collaboration of two unions representing oil workers, including those at Chevron, said it has been working with the corporation on “several key” concerns such as salary, job security, rosters, and training standards.

It added that workers had been “consistently disappointed with the company’s approach to negotiations with the union and Chevron not accepting that an industry standard agreement should apply to the work they perform for the company.”

Australia is one of the biggest LNG exporters in the world and its supplies have helped to cool global energy prices, especially when Russia slashed supplies of natural gas to Europe after the start of the Ukraine war in early 2022.