Australia union threatens strikes at Chevron LNG facilities

SYDNEY, Aug 25 (Reuters) – Unions at Chevron’s (CVX.N) liquefied natural gas (LNG) facilities in Australia warned on Friday that work stoppages could cost the U.S. energy major billions of dollars if demands over wages and conditions were not met.

The warning came even as workers at a nearby Woodside facility voted to approve a deal struck by the same unions.

Workers voted on Thursday to authorise the Offshore Alliance of unions to call a strike at Chevron’s Gorgon and Wheatstone projects.

The North West Shelf, along with the Gorgon and Wheatstone projects, accounts for about a tenth of global LNG supplies.

In a Facebook post on Friday, the union alliance said of Chevron’s senior management team: “Their stupidity is about to cost them $billions in lost production and profit.”

The unions also criticised the company for putting a proposal directly to a worker vote without going through the bargaining process, and the unions threatened industrial action.

Chevron said it had not received any notice of intent to strike from the unions.

It referred questions to Thursday’s comments in which it had said the company would continue to take steps to maintain safe and reliable operations in the event of disruption.

“We will also continue to work through the bargaining process as we seek outcomes that are in the interests of both employees and the company,” it added in the statement.

More than 99% of about 450 workers voted to authorise a strike, which could include refusing to load tankers or vessels, bans on certain tasks and a full strike.

Results of another strike ballot for workers at a separate Wheatstone facility are due on Monday.

The Offshore Alliance, which combines the Maritime Union of Australia and Australian Workers’ Union, must give Chevron seven working days’ notice before a strike.

Any strike would have forced Asian buyers to outbid Europe to attract gas cargoes. China and Japan are the top two lifters of Australian LNG, followed by South Korea and Taiwan.

Energy analyst Saul Kavonic said Chevron could face some “low-level” industrial action but that was unlikely to significantly disrupt supply.

“The public rhetoric will once again ramp up as the Chevron negotiations get underway, as a normal part of the Australian union bargaining process,” he said.

WOODSIDE STRIKES A DEAL

The escalation comes a day after the Offshore Alliance reached an in-principle agreement at Woodside’s (WDS.AX) North West Shelf LNG facility, Australia’s largest, triggering a sharp fall in Dutch and British wholesale gas prices on Thursday.

On Friday the Alliance said workers had “overwhelmingly endorsed” the draft agreement in a meeting the previous evening. No strike action would take place while the agreement was finalised and put to a second formal vote.

The deal, which will be finalised and sent to the unions on Monday, “significantly” hikes worker pay, prevents Woodside replacing workers with labour hire or contractors and will require a majority vote of employees for any roster changes, the unions said in a statement.

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