The prospect of a possible strike at a liquefied natural gas (LNG) plant in Australia has pushed wholesale gas prices up in Europe. Benchmark gas prices for the EU and UK rose around 10% on Monday, according to Bloomberg.
The Offshore Alliance union warned that a strike at the North West Shelf facility could start as early as 2 September if no deal on pay is reached.
There are fears that strike action at Woodside Energy Group’s North West Shelf facility could cause disruption to shipments of LNG from Australia, which is a key global supplier. Workers at two other offshore LNG facilities, Gorgon and Wheatstone, operated by Chevron, are also voting on strike action, with results expected on Thursday. Together the three plants make up about 10% of the world’s supply of LNG.
Following the start of the war in Ukraine, Russia slashed supplies of natural gas to Europe, which led countries to seek out alternative sources of energy. Many countries are relying on LNG to fill the gap. Australia is one of the world’s largest exporters of LNG. The others are Qatar and the US.
Last week, Cornwall Insight predicted that higher gas prices resulting from the Australian uncertainty would contribute to a significant rise in the Ofgem price cap in January.
It forecast a cap of £2,082.56 for a typical annual household bill for the first quarter of 2024, a rise from its £1,925.71 forecast for the fourth quarter of 2023.
What the dispute is about:
Unions at Woodside Energy Group’s (WDS.AX) North West Shelf offshore gas platforms on Sunday announced plans to strike as early as Sept. 2, which could eventually disrupt shipments of liquefied natural gas (LNG) from top global exporter Australia.
The strike threat escalates a long-running dispute between Woodside and workers over pay and conditions on its North West Shelf gas platforms, which feed Australia’s biggest LNG plant.
Unions in Australia are required by law to give companies seven working days’ notice before any industrial action but can elect to call off any action before then.
The Offshore Alliance, which combines the Maritime Union of Australia and Australian Workers’ Union, said in a Facebook post it had “unanimously endorsed” giving Woodside seven working days’ notice to strike if its bargaining claims are not met by close of business on Wednesday. That would mean a strike could start as soon as Sept. 2.
“Woodside tried every tactic it could think of to avoid bargaining with its workers as a collective, but in the end the company failed to maintain the status quo it liked – one where what the company says goes,” Offshore Alliance spokesperson Brad Gandy said in a statement. “Offshore Alliance members don’t take industrial action lightly, but Woodside is really leaving them with little choice here.”
A spokesperson for Woodside declined to comment on Sunday’s update, referring to a previous statement that the company “continues to engage actively and constructively in the bargaining process”.
