Strikes at Australian LNG terminals postponed. European gas market still faces uncertainty

A union representing workers at several LNG terminals in Australia said yesterday that it had reached a preliminary agreement with Chevron. Strikes at the Gorgon and Wheatstone LNG terminals, which were due to begin today, have therefore been postponed for now. The agreement is preliminary and will need to be approved by terminal workers. Natural gas prices on European markets, however, remain high, particularly in light of developments in the Middle East.

The threat of strikes in Australia, which could have significantly curtailed supplies of liquefied natural gas (LNG) to the global market, was one of the strongest factors driving gas prices on the European market over the summer. While the threat at the North West Shelf terminal, operated by Woodside Energy, was averted in the summer following a swift agreement, negotiations between the unions and Chevron over the Gorgon and Wheatstone terminals dragged on considerably.

Workers at the two terminals even began striking, but Chevron managed to keep them operating with staff from other facilities. The strikes were then called off in September, while negotiations continued. Last week, however, the Offshore Alliance, a federation of two trade unions, announced that strikes would resume today.

Yesterday, however, both sides announced that they had reached a preliminary agreement after a series of talks mediated by Australia’s workplace relations regulator. The strikes have therefore been postponed for now, but the agreement still needs formal approval.

"At yesterday’s meeting, Offshore Alliance members agreed to suspend the strikes. We hope this matter can now be resolved, but if Chevron tries to change the agreement again, our members will likely have no choice but to consider resuming strike action," Offshore Alliance spokesperson Brad Gandy said on Wednesday, according to Montel.

Chevron representatives said they welcomed the preliminary agreement and planned to present specific proposals for it yesterday. Terminal workers are then expected to vote on whether to accept the agreement next week.

Gas prices on the European market remain high

Despite the reduced risk of disruptions to LNG supplies from Australia, wholesale gas prices in Europe remain elevated. Gas prices surged last week, mainly in response to escalating geopolitical tensions in the Middle East following Hamas’s attack on Israel and retaliatory actions in the Gaza Strip. In light of current developments, energy commodity prices may well remain highly volatile.