WA LNG strike averted through 11th-hour deal
The renewed threat of strikes at two huge Chevron-run liquefied natural gas plants in Western Australia has been averted after a deal struck with unions little more than 24 hours before industrial action was due to start.
Unions withdrew strike plans at Chevron’s Gorgon and Wheatstone LNG facilities after netting down a deal on Tuesday afternoon after the US company compromised on some key terms.
Chevron’s Gorgon liquefied natural gas plant on Barrow Island is Australia’s second-biggest.
The Offshore Alliance – a combination of the Australian Workers’ Union and Maritime Union of Australia – had been set to restart rolling stoppages on Thursday after accusing Chevron of reneging on an in-principle agreement reached last month.
However, the Alliance on Wednesday confirmed it had finalised draft agreements with Chevron that were voted up by members in a mass meeting on Tuesday afternoon. Workers also withdrew the protected action.
Offshore Alliance spokesman AWU WA Secretary Brad Gandy said Chevron America “kept altering the details of the deal even after they’d shaken on it with the Offshore Alliance negotiating team in late September”.
“It’s sad Chevron seems unable to do an honest deal, and we hope this can now be put to rest but if Chevron tries to alter the deal again our members will obviously have no choice but to consider taking protected industrial action,” he said.
“People dealing with Chevron should know this company will try every trick in the book to dud them and not to trust anything they say unless it’s in black and white.”
Chevron has yet to comment.
The deal for the two plants, which together account for about 7.5 per cent of global supply of LNG, follows a similar enterprise agreements struck with the Woodside Energy-managed North West Shelf venture in August. That was the first union collective agreement in the venture’s decades-long history, and followed a lengthy but unsuccessful legal battle by Woodside to try to prevent unions from bargaining.
Similar deals have also been agreed at Inpex Corporation’s Ichthys LNG in northern Australia, and at Shell’s Prelude floating LNG plant off the far north-west coast. The Prelude agreement came only after a strike that shut the facility for more than two months last year and caused the deferral of an estimated $1.5 billion of production.
Sydney-based energy analyst Saul Kavonic said Chevron made some real compromises “at the eleventh hour” that enabled a deal to be re-struck and the strikes withdrawn.
“This draws to a close the strike risks across Australia’s largest offshore LNG projects,” he said.
“Some union negotiations at Karratha Gas Plant, Pluto and some smaller oil and gas facilities are likely over the next year, but they shouldn’t result in any material impacts to global gas supply.”
Worries about reductions to global gas supply resulting from the WA industrial disputes had caused European gas prices to spike in August, at one stage by as much as 40 per cent.
Mr Kavonic, who is due to join MST Financial later this year, said the outstanding negotiation items in the Chevron negotiations were not significant enough that they couldn’t be resolved.
“The risk only arose because trust had broken down between the parties, and emotions can run high by some of the individuals involved,” he added.
Introducing your Newsfeed
Follow the topics, people and companies that matter to you.
Find out moreRead More
Latest In Energy
Fetching latest articles