Major Australian gas facilities’ employees to go on strike

On the 7th of September, employees at two large natural gas plants in Australia will commence a strike. This could make natural gas prices higher around the world.

After talking with unions for several weeks, they finally reached an agreement on payment and working conditions.

Chevron, the big US energy company that runs the places, said it would “keep doing things to make sure everything stays safe and works properly, even if something goes wrong at our sites. ”

Concerns about potential work stoppages have recently caused the cost of gas bought and sold in bulk in Europe to increase.

The Wheatstone and Gorgon sites in Western Australia make more than 5% of the world’s LNG (liquified natural gas). There are currently about 500 workers at these two plants.

According to a strike plan seen by the BBC, workers will stop working for up to 11 hours each day during the industrial action.

Chevron said in a statement on Tuesday that although they don’t think strikes are needed to make a deal, they understand that employees have the right to go on strike if they need to.

It also mentioned that it would “keep negotiating to find solutions that are good for both workers and the company. ”

The Offshore Alliance is a group of two unions that represent energy workers, including those who work at Chevron. The group has been trying to make an agreement with Chevron on important things like how much they get paid, how secure their jobs are, their work schedules, and the standards for their training.

The workers were not happy with how the company was negotiating with the union and they were also upset that Chevron didn’t agree to use a common agreement that is normally used in their industry for the work they do.

According to energy analyst Saul Kavonic, he believes that the strike will not have much effect on gas prices worldwide.

But he cautioned that if the workers increase their strike, the cost of energy could go up a lot.

He said that if there was a very unlikely situation where there is a long-lasting problem with getting enough supplies, prices could go up to the same crisis levels as last year.

Samantha Dart, a senior energy analyst at Goldman Sachs, recently explained to the BBC that the issue lies with the facilities in Australia that make liquid natural gas. These facilities are providing natural gas to all of Asia.

“When countries in Asia don’t have enough of natural gas, they purchase it from the Atlantic Basin instead. This means that liquefied natural gas (LNG) that would have been sent to Europe is redirected to Asia due to the increased competition for supply. ”

When Russia invaded Ukraine last year, the prices of oil and gas went way up. As a result, people and businesses had to pay much more for their energy bills.

Last week, the prices of wholesale gas in Europe increased because people were worried about the possibility of a shortage in supply from Chevron and another Australian LNG plant owned by Woodside Energy.

On Thursday, Woodside announced that it made an initial agreement with the worker unions at its North West Shelf facility.

The Woodside and Chevron plants together provide about 10% of the world’s LNG.

A map is a visual representation of an area. It shows the features and locations of places on Earth.

Russia reduced the amount of natural gas it sent to Europe after the Ukraine war began in 2022.

That made prices higher everywhere and caused countries to look for different ways to get energy, like LNG.

Australia is a country that sells a lot of natural gas to other countries. This has helped to make energy prices lower worldwide.

LNG is a type of natural gas that has been purified and cooled to a very cold temperature of around -160C. It is made up of methane, which is the main component, and sometimes mixed with ethane.

This process changes the gas into a liquid form, which can be transported in tanks that have high pressure.

When the LNG reaches its target place, it is transformed into gas again and can be used just like regular natural gas for activities such as heating, cooking, and producing electricity.