Australia regulator clears way for strike vote at Chevron LNG plants

SYDNEY/SINGAPORE, Aug 11 (Reuters) — Australia’s labour regulator cleared the way for strike action at Chevron’s Wheatstone and Gorgon liquefied natural gas (LNG) facilities if workers vote in favour of such a step, fuelling concerns the country’s exports could be cut.

The Fair Work Commission said in an order dated Thursday that the union could hold a ballot of employees to decide if they wanted to make a decision on taking industrial action.

Chevron and Woodside Energy Group have been holding talks with unions to avert threatened strikes over pay and conditions at Australian facilities that together supply about 10% of the LNG market. A drop in shipments would increase competition for the super-chilled fuel, forcing Asian buyers to outbid European buyers to attract LNG cargoes.

Dutch and British wholesale gas prices retreated on Thursday from a two-month intraday high the previous day after concerns faded over tight LNG supply due to the possible strikes.

Chevron said on Friday it was taking steps to ensure reliable operations can be maintained if any disruption happens.

“We continue to engage our employees and their representatives as we seek outcomes that are in the interests of both employees and the company,” a spokesperson said.

The union, Offshore Alliance, declined to comment. On Thursday, it said it had not reached an agreement with Chevron on several issues including pay.

Credit Suisse analyst Saul Kavonic said the risk of strikes stopping production across the LNG plants for more than a week was exceptionally low.

“This is all part of union negotiations. While there will be loud rhetoric threatening large production outages as the unions and LNG companies test their positions, it is unlikely global supply will actually be impacted materially,” he said.

Asia spot LNG prices