Workers at two major liquefied natural gas (LNG) plants in Australia, operated by US energy giant Chevron, are planning to go on strike from 7 September. This move has raised concerns about a potential disruption to global gas prices. The Chevron-operated Wheatstone and Gorgon plants together produce more than 5% of the world’s LNG. In response to the strike, Chevron has stated that it will take necessary measures to ensure the safe and reliable operation of its facilities.
The fear of strikes at these Australian LNG plants has already had an impact on wholesale gas prices in Europe. In fact, recent concerns about disruptions to supply from Chevron and another Australian LNG plant run by Woodside Energy have pushed up gas prices in Europe. However, Woodside Energy has recently reached a preliminary agreement with unions representing workers at its North West Shelf plant, alleviating some of the uncertainties in the market.
The potential strike at these LNG plants has far-reaching implications on the global gas market. The combined output of the Woodside Energy, Chevron, and other Australian LNG plants constitutes about 10% of the world’s supply of LNG. Any disruption to their operations can significantly impact the supply-demand dynamics and subsequently affect prices.
While Chevron maintains that it believes industrial action is unnecessary for reaching an agreement, it acknowledges the employees’ right to take protected industrial action. The company also emphasizes its commitment to negotiating outcomes that benefit both its employees and the company. It remains to be seen how the negotiations will progress and whether the strike will be averted.
The current situation raises concerns about the stability of gas supply and the potential for price volatility. Natural gas is a critical energy source for many industries and households worldwide, and any significant fluctuations in its price can have a cascading effect on various sectors.
In conclusion, the planned strike at the Chevron-operated LNG plants in Australia has the potential to impact global gas prices. The combined output of these plants constitutes a significant portion of the world’s LNG supply. The fear of supply disruptions has already pushed up gas prices in Europe, and if the strike proceeds as planned, it could lead to further price increases and market uncertainties. The negotiations between Chevron and its employees will play a crucial role in determining the outcome and the potential impact on the global gas market.
