• Tuesday, June 18, 2024
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Relief for gas prices as Chevron Australia LNG strike ends

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There seems to be respite for global gas prices after the Australian Union Alliance decided on Friday to call off its strikes, which had been looming over Chevron’s two major local liquefied natural gas (LNG) projects. The projects had the potential to disrupt approximately 7 percent of global LNG supplies.

This development came as the Union Alliance and Chevron reached an agreement to address the disputes that had been worsening.

“The Offshore Alliance will now work with Chevron to finalise the drafting of the agreement, and members will soon cease current industrial action,” stated Offshore Alliance spokesperson Brad Gandy.

This agreement marks an end to a bitter wage war that had jacked up global gas markets for six weeks, even leading to a substantial increase of up to 35 percent in LNG prices during August.

The situation began to ease after a separate dispute involving the country’s largest LNG plant, operated by Woodside Energy, was successfully resolved.

The proposed deal between the union alliance and Chevron encompasses what has been described as “substantial improvements” in terms of pay, job security, locked-in schedules, and opportunities for career advancement, according to the alliance, which represents a combination of two unions.

According to Reuters, during a brief hearing on Friday, the Fair Work Commission (FWC) decided to adjourn the matter for four weeks, providing both sides with the necessary time to finalise the terms of the agreement.

Read also:Workers at Chevron Australia LNG projects start strike as union talks collapse

Just the day before, the commission, which holds the authority to enforce settlements, had “strongly recommended” that the involved parties accept its proposals to bring an end to the work stoppages.

Despite the industrial action, there were no disruptions in LNG shipments, even following an incident at the Wheatstone plant.

The alliance had been pushing Chevron to align its pay terms with those agreed upon by Woodside in their initial deal with the unions.

According to figures submitted by the union to the commission, the total remuneration for offshore platform technicians ranged from A$350,233 at the entry-level to A$418,337 at the highest level in the Woodside agreement.

Energy analyst Saul Kavonic who spoke to Reuters said that he expects this deal will likely put an end to most of the industrial action offshore Western Australia. Union agreements, which typically have a duration of around four years, are now expected to be in place for most offshore LNG sites.

“Although we should expect the unions will increase their membership in the wake of the recent successes they have had, and there is still some scope for more union action at the North West Shelf LNG plant and some offshore (floating production storage and offloading units) next year,” he said.