Chevron and Australian unions hold last-minute talks in attempt to avoid LNG strike

US-based energy company Chevron and Australian unions representing workers at two major liquefied natural gas (LNG) facilities were yesterday holding talks ahead of industrial action that is scheduled to commence on September 7th.

A series of work stoppages were scheduled to begin today that, if the unions’ demands are not met, could escalate into a total stoppage.

Chevron’s Gorgon and Wheatstone plants in Western Australia account for more than 5% of global LNG capacity.

Australia’s Fair Work Commission has been hosting mediation talks between Chevron and the Offshore Alliance – which is a partnership of two unions representing energy workers. However, energy analyst Saul Kavonic warned the BBC that “lower level strikes look set to start tomorrow, which will add inefficiencies but are unlikely to materially impact global supply”.

The threat of rolling full stoppages from September 14th potentially would have an impact on global energy markets. Kavonic noted that “in the unlikely event the situation escalates to full stoppages, then around 6% of global supply would come offline, which could see prices spike if the strikes were to be prolonged into northern hemisphere winter”.

Tim Harcourt from the Institute for Public Policy and Governance at the University of Technology Sydney said that he did not expect a protracted strike.

“Generally, Australian disputes don’t last very long because the Fair Work Commission is designed to intervene very early, so we don’t have the long disputes you get in the USA or the UK. Having said that, because it’s a significant industry with 500 workers, it could have some impact on global supply. But I don’t think we’re at that stage yet”, he said.