Worker unions call off strike after deal with Chevron over Australia LNG facilities

Australia's Offshore Alliance said Oct. 18 it has clinched a deal with Chevron over working terms and conditions and agreed to call off its planned strike actions at the company's Gorgon and Wheatstone LNG facilities.

During a meeting at 3 pm Western Australian Time (0700 GMT) Oct. 17, members of the OA, an alliance between the Australian Workers' Union (AWU) and the Maritime Union of Australia, endorsed three draft enterprise agreements for three Chevron gas facilities, Gorgon, Wheatstone Platform and Wheatstone Downstream, the OA said in a statement sent to S&P Global Commodity Insights.

"At yesterday's meeting Offshore Alliance members agreed to suspend that protected industrial action," it said.

In a separate statement, Chevron Australia said later Oct. 18 that the AWU has advised the company that its members "will no longer go ahead" with planned industrial action from Oct. 19.

"Following in-principle agreement [with the unions], we will provide the proposed Enterprise Agreements tonight to the relevant employees to consider, opening the required seven-day access period, with a ballot to be held next week," a Chevron Australia spokesperson said.

"If voted up, the agreements will then be submitted to the Fair Work Commission for approval."

An FWC spokesperson declined to comment Oct. 18.

"Offshore Alliance members at Chevron have shown incredible patience with this American outfit, which kept altering the details of the deal even after they’d shaken on it with the Offshore Alliance negotiating team in late September," Offshore Alliance spokesperson Brad Gandy said in a statement.

"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," Gandy said.

The FWC, the country's industrial tribunal, did not have any hearing between its Commissioner Bernie Riordan, Chevron and workers unions Oct. 17 just days ahead of planned strike action due to begin at the US company's LNG facilities in the country, according to information from the commission's website, after several rounds of discussions until Oct. 16.

The OA had earlier said Oct. 15 that 91% of its members supported starting protected industrial action at the Gorgon and Wheatstone LNG facilities for the second time from Oct. 19.

Chevron had previously requested the FWC commissioner's assistance to conclude drafting enterprise agreements for Gorgon, Wheatstone Platform and Wheatstone Downstream based on clarifications to implement the commissioner's Sept. 21 recommendation, which was accepted by Chevron and the unions.

This was also after the unions called off a Sept. 22 PIA at Chevron's Wheatstone and Gorgon facilities, after endorsing a recommendation from the FWC commissioner to finalize enterprise agreements.

The OA started its PIA at Chevron's onshore and offshore LNG facilities Sept. 8 and said its members would stop work completely for two weeks from Sept. 14.

The Gorgon project comprises a three-train, 15.6 million mt/year LNG facility and a domestic gas plant, while the Wheatstone project has a nameplate capacity of 8.9 million mt/year of LNG and a domestic gas plant.

The Platts JKM, the benchmark price reflecting LNG delivered to Northeast Asia, was assessed for December at $17.575/MMBtu on Oct. 17, down from $18.344/MMBtu on Oct. 16, according to S&P Global data.

Market participants in Asia had said they were relatively unconcerned about potential strikes in Australia, while warmer weather forecasts in Europe and Asia have kept market sentiment bearish, according to market sources.

The December Platts Dutch TTF was assessed at $15.863/MMBtu on Oct. 17 at Asian close, with the JKM-TFU spread pegged at $1.547/MMBtu.