Australia LNG strikes would need to last over a month to spike prices, analysts say

HOUSTON, Aug 22 (Reuters) — Threatened strikes by workers at Australian liquefied natural gas (LNG) providers would need to last more than a month to significantly push up global prices, analysts said this week.

The Woodside Energy and Chevron operations supply about 10% of global LNG output and worries of a walkout have lifted prices of European gas benchmark TTF forward curve 5%-7% higher over the September-to-April period than just before the news of a potential strike.

The three Australian plants facing possible strikes risk losing 4 to 5 billion cubic meters of production per month if they go offline, according to Columbia’s Center on Global Energy Policy.

But risks of production stoppages have been mostly priced in, analysts say, and high LNG storage levels in Asia and Europe rule out the likelihood of major price increases if short-term strikes materialize, they say.

“If production was stopped for one month in the three plants, prices would remain relatively the same” in Asia, with only “a slight increase between September and November”, said Bradley Churchman, an analyst with RBAC forecast firm.

With no risks of strikes, the Asian LNG benchmark would hover between $11.70 and $15.00 per million British thermal units (mmBtu) this year and peak at $23.60 in January, a seasonally high month due to winter heating demand, Churchman said.

The average LNG price for October delivery into north-east Asia