Union members vote again to start strike at Australia’s Gorgon, Wheatstone LNG plants Oct 19

Australia’s Offshore Alliance said Oct. 15 its members had 91% support for kick starting protected industrial action at Chevron’s Gorgon, Wheatstone LNG facilities for the second time from Oct. 19.

“In a secret ballot over the past 36 hours, 410 members voted in a secret ballot, with 91% support for kicking off PIA on Thursday — for the second time,” the Offshore Alliance said in a Facebook post Oct. 15. “Members have made it clear that they want Chevron to stop twisting the draft terms of our EBA’s [Enterprise Bargaining Agreement] and are prepared to ramp up PIA until our EBA’s are properly sorted.”

Officials from the Offshore Alliance, an alliance between the Australian Workers’ Union and the Maritime Union of Australia, were not immediately available for comment.

The Offshore Alliance’s latest comments came ahead of scheduled talks between Australia’s Fair Work Commissioner Bernie Riordan, Chevron and the workers unions on Oct. 16 after three rounds of discussions over Oct. 11-13.

“We are extremely disappointed that despite a strong recommendation in writing from Commissioner Riordan to the unions to withdraw protected industrial action while drafting of Enterprise Agreements is finalized, yesterday (Oct. 14) the unions advised that members have voted not to cancel the action planned for Oct. 19,” a Chevron Australia spokesperson said late Oct. 15. “We understand union leaders recommended members not withdraw the notified industrial action.”

The latest moves came as Chevron requested the FWC commissioner’s assistance to conclude drafting the Enterprise Agreements for Gorgon, Wheatstone Platform and Wheatstone Downstream based on clarifications to implement the commissioner’s Sept. 21 recommendation which was accepted by Chevron and the unions.
The spokesperson added that Chevron participated in a genuine and meaningful way in the conferences held last week and accepted every clarification provided by the commissioner on the small number of items in his recommendation which the parties interpreted differently.

“Conversely, the unions have continued to add matters into dispute and are now withholding agreements on other matters on the basis that they do not have instruction from members, despite holding mass meetings with members on October 13 and 14,” the spokesperson said. “The union’s decision to ignore the recommendation to withdraw the protected industrial action notice while discussions are continuing is very concerning, unreasonable and undermines the considerable progress made prior to Chevron requesting the Commission’s assistance last week.”

The latest move by the unions came after they called off a Sept. 22 PIA at Chevron’s Wheatstone and Gorgon facilities after endorsing a recommendation from the FWC commissioner to finalize enterprise agreements.

The Offshore Alliance started its PIA at Chevron’s onshore and offshore LNG facilities Sept. 8 and said its members would stop work completely for two weeks from Sept. 14.

Japanese buyers are foundational customers for the Gorgon and Wheatstone projects, which are among Australia’s largest resource developments. The Gorgon project comprises a three-train, 15.6 million mt/year LNG facility and a domestic gas plant, while the Wheatstone project has a nameplate capacity of 8.9 million mt/year of LNG and a domestic gas plant.

Japanese LNG lifting volumes account for 30% of Gorgon output and 83% of Wheatstone output, according to S&P Global Commodity Insights calculations based on industry information.

A spokesperson for Tohoku Electric, which lifts 920,000 mt/year of Wheatstone LNG, said Oct. 16 the company does not currently see impact from planned strike actions from Oct. 19 on its LNG procurement from the Australian project.

Tohoku Electric, however, is closely monitoring potential impact on its LNG procurements for winter, the spokesperson added.

A spokesperson for Tokyo Gas, which lifts 1.1 million mt/year of Gorgon LNG, said that it will ensure maintaining stable supply by closely monitoring developing situations.

“We did not have any impact on our cargo from the previous strike,” the spokesperson added.

Platts JKM, the benchmark price reflecting LNG delivered to Northeast Asia, for the December derivatives contract was observed tradeable at $17.875/MMBtu at 3 pm Singapore time Oct. 16, down from $18.462/MMBtu assessed at London market close on Oct. 13, according to S&P Global data, as market participants in Asia were not overly concerned about renewed threats of strikes at Australian LNG facilities.

The December Platts Dutch TTF was trading at $17.136/MMBtu at 3 pm Singapore time Oct. 16, with the JKM-TFU spread pegged at 73.9 cents/MMBtu.
Source: platts