Workers at Chevron Corp.’s liquefied natural gas (LNG) facilities. in Australia began their planned strike of at least three weeks on Friday, which could threaten supplies to Asian markets.
Most of the production from Chevron Australia Pty.’s Gorgon and Wheatstone projects. Ltd, as well as the North West Shelf facility in which it has a non-operating interest, is destined for Asian countries, with which it has long-term contracts, according to the company.
“Within 24 hours of the start of protected industrial action at Chevron’s Gorgon and Wheatstone facilities, Chevron has begun evacuating its contractor workforce,” the Offshore Alliance said in a communicated on Facebook.
“Chevron chartered a special flight this morning [September 8] to Barrow Island to evacuate 50 blue- and white-collar contract crews from the Gorgon project,” the union added.
Rigzone asked Chevron Australia Pty. Ltd. on the weekend the confirmation of the development, but has not yet received a response.
The start of the strike by the Offshore Alliance, which is made up of the Australian Workers Union (AWU) and the Australian Maritime Union, means the intervention of the Australian Fair Work Commission (FWC), confirmed by the AWU in a statement on September 1. failed
The Offshore Alliance extended the strike by at least two more weeks after the originally planned seven-day walkout, accusing the energy giant of evading bargaining talks.
“Offshore Alliance lawyers have sent Chevron a new Notice of Protected Industrial Action which will commence after our first 7 days of PIA commences on Thursday 7 September,” the union said in a statement on Facebook on 5 of September The Action Notice will increase work bans and OA [Offshore Alliance] will have 24 x 1-hour stops, every day for 14 days from Thursday 14 September”.
The Offshore Alliance had said a majority of workers at the Gorgon and Wheatstone facilities in Western Australia voted in favor of strike action to press for improved employment standards. Of the 253 members of the Offshore Alliance in Gorgon, 249 voted in the strike vote, all in favor. Of Wheatstone’s 188 members, 184 voted, all in favor of a strike.
Meanwhile, all six members of the Electric Trades Union in Gorgon and two in Wheatstone voted in favor of a strike, according to an Aug. 25 statement from the Offshore Alliance.
The latest strike ballot results confirmed by the FWC showed all 37 AWU members eligible to vote said yes to a strike, while nine members of the Communications, Electricity, Electronics, Energy, Information Union , Australia Post, Plumbing and Allied Services that were eligible. vote also supported a strike.
“The Offshore Alliance has 98 per cent union density at the Gorgon and Wheatstone facilities and its members have voted 100 per cent to take Protected Industrial Action in support of an EBA union. [enterprise bargaining agreement]” said the union’s announcement of the voting results.
The union’s Sept. 5 statement said the expanded action was in response to Chevron Australia trying to sidestep a union-initiated settlement and choosing to put forward its own terms. The Offshore Alliance said an Enterprise Agreement (EA) put forward by the company for a vote had won just seven supporters out of 979 employees.
The AWU’s September 1 statement confirming the FWC’s intervention said: “Members of the Offshore Alliance who work for the foreign company have yet to reach agreement on a number of key claims, such as job security, agreed rosters, mutual agreement on transfers to other Chevron workplaces, mutual agreement on overtime work, training standards, travel arrangements and rates of pay.”
“Members are seeking remuneration outcomes that align with industry benchmark standards that apply to Chevron, Shell and INPEX contemporaries and will soon apply to Woodside. In negotiations to date, Chevron has proposed terms lower remuneration than some Tier 2 oil and gas operators in Australian waters.” .
The AWU said in the statement that Chevron Australia remains “WA’s only major outfit [Western Australia] gas fields without a standard EA enterprise agreement covering their workforce.”
“Offshore Alliance members at Shell’s LNG facilities secured an EA last year after 76 days of PIA [protracted industrial action]. INPEX members secured an EA in 2022. And last week, representatives of Offshore Alliance members in Woodside endorsed a negotiated agreement in principle with the company, with a vote on the EA to follow in next few weeks,” he said.
Confirming the Offshore Alliance’s first strike notice, Chevron Australia said in a statement emailed to Rigzone on August 29: “While we do not believe industrial action is necessary to reach an agreement , we recognize that employees have a right to be protected. industrial action and will continue to take steps to maintain safe and reliable operations in the event of an outage at our facilities.”
In a statement to Rigzone on Wednesday about the new strike notice, he maintained that he is continuing to negotiate.
“We will also continue to take steps to maintain safe and reliable operations in the event of an outage at our facilities,” Chevron Australia said.
The Offshore Alliance also said in a separate statement on Thursday that the simultaneous reference agreement submitted by Chevron Australia’s contractor Altrad-AGC had been ruled by the FWC as “genuine and bogus” with several people involved in an “exercise simulated”. Rigzone has not yet received a response to a request for comment emailed to Altrad on Monday morning.
Supply risk
S&P Global reported on Friday: “A number of LNG buyers in Asia said they expect to see a limited impact on supply in the first few weeks. [of the strike]but it could feel a bigger blow if the strikes last longer”
“The strike situation would affect Japanese buyers more, but they seem to be holding on,” said an unnamed LNG importer in China, quoted by the financial analytics and news provider.
“There will be limited impact from the strikes in the short term as inventory is high in Asia, the longer term impact could be there if the strikes continue for a prolonged period.”
The Offshore Alliance had also warned that a strike at Gorgon and Wheatstone would lead to supply uncertainty in Western Australia.
In a statement on August 22 about a planned strike against the North West Shelf plant, which is operated by Woodside Energy Group Ltd., the union warned: “Gas users in Western Australia could face a greater uncertainty over gas supplies in the coming weeks when Chevron’s Gorgon and Wheatstone plants could also face industrial action.”
“The three plants supply about 45 per cent of WA [Western Australia] gas consumption”, says the statement published on Facebook.
But on August 24, the Offshore Alliance said it had reached an agreement in principle with local company Woodside to avoid strike action.
Potential interruption of the project
The strike which began on Friday comes amid a plan to upgrade the Wheatstone plant, which Chevron Australia says is “one of the largest LNG projects in the world and the largest single resource project in Australia’s history” .
Chevron Australia said on August 23 that it was working to increase the facility’s capacity from 205 terajoules per day (TJpd) to 215 TJpd, or five percent.
To contact the author, please email jov.onsat@rigzone.com
