Chevron Australia is engaging in negotiations with unions representing employees at its two liquefied natural gas (LNG) facilities in Australia, in an effort to prevent impending strikes scheduled for Thursday in the event of a failed agreement.
A senior member of Australia’s industrial authority, the Fair Work Commission (FWC), is facilitating discussions throughout the week in Perth, according to an initial Reuters report.
The dialogue aims to bridge differences through mediated bargaining sessions, as Chevron’s spokesperson expressed the company’s hope for resolution.
Previously, Chevron had directly presented a pay and conditions proposition to its employees, which they largely rejected, bypassing union involvement.
The Offshore Alliance, composed of two unions, has yet to provide a statement on the current status of talks, which are not accessible to the public or media.
In the absence of an accord, industrial action is slated to begin at 6:00 am local time on Thursday.
Chevron’s Gorgon and Wheatstone projects are at the center of this dispute, contributing over 5% of global LNG production capacity.
The proposed work stoppages would encompass multiple time blocks, resulting in up to 11 hours of halted work, continuing until at least September 14.
The labor group asserts that these stoppages could have severe financial ramifications for Chevron, potentially incurring losses amounting to billions of dollars.
The potential prolonged disruption in operations carries the risk of impacting LNG exports, creating competition for this super-chilled fuel.
Asian buyers might find themselves outbidding their European counterparts to secure LNG cargo.
China and Japan, followed by South Korea and Taiwan, are major consumers of Australian LNG.
Gorgon, the second-largest LNG facility in Australia, possesses an export capacity of 15.6 million tonnes per annum, while Wheatstone holds an 8.9 million-tonne capacity.
As the largest global exporter of LNG, Australia’s ongoing dispute has contributed to fluctuations in natural gas markets.
Energy analyst Saul Kavonic notes that the proposed work disruption could introduce inefficiencies to Chevron’s operations, potentially affecting production but unlikely to significantly alter global markets.
A recent analogous dispute between the union alliance and the North West Shelf LNG facility, Australia’s largest, reached resolution after worker approval of a negotiated deal.