International gas prices are at the mercy of workers in the Australian liquefied gas sector, which is currently undergoing a violent shock, threatening to continue exporting supplies to Asia and Europe.
About two weeks ago, workers threatened to go on strike, to demand better working conditions in 3 liquefied gas production projects responsible for about 10% of the global market, according to a report published by the agency. bloombergand was viewed by the specialized energy platform.
And in the event of failure of the talks between the trade unions representing workers in the offshore gas platforms at the “North West Shelf” project of the Australian Woodside Energy company, and the “Gorgon” and “Whetstone” stations of the American company Chevron, the workers will go on strike. Starting next September 2, 2023.
European gas prices
European gas prices witnessed record highs, after news of the possibility of stopping 3 of the major Australian liquefied gas projects.
Futures prices rose by 3.2%, after a significant decline recorded earlier.
Dutch futures prices for the month ahead, which are the benchmark prices in Europe, were up 1.9% per 41.57 MWh by 12pm local time in Amsterdam.
European countries usually use gigawatts and terawatts in their dealings.
(GWh = 3.2 million cubic feet of gas)
(terawatt hour = 3.2 billion cubic feet of gas)
Today, gas futures prices in the United Kingdom increased by 1.9%.
And the prices of gas futures contracts in Europe recorded their second increase in less than a week on August 15, 2023, due to the tensions raised by the news of the Australian liquefied gas sector workers’ strike, and the consequent global supply scarcity, according to a report published by the agency. bloomberg Which was reviewed by the specialized energy platform.
The price of the Dutch futures contract settled, up 13% at the end of Tuesday, August 15, after opening trading up 18%.
Futures prices also rose by 28% on August 9, 2023.
The chart below – prepared by the specialized energy platform – shows global LNG imports by region in 2021 and 2022:
Australian LNG workers strike
Traders are awaiting the results of the negotiations, which are expected to continue tomorrow, Wednesday, August 23, 2023, between Woodside Energy and trade unions, who are threatening to stop work at the North West Shelf export terminal, the largest liquefied gas project in Australia, in protest. On the deterioration of working conditions and to demand higher wages.
“In our talks with workers, we aim to reach an institutional agreement, and we are making tangible progress through constructive cooperation,” says Meg O’Neill, CEO of Australian Woside.
Citigroup consulting analysts say that if workers do not decide to go on strike and production operations are not disrupted, the gas market will be oversupplied, and prices will drop before November 2023.
Analysts of Inspired Consulting also confirmed that any indication of the implementation of the strike may lead to a rise in natural gas prices until the onset of winter.
Although Europe rarely buys Australian LNG, the continent desperately needs the purchase to secure vital stocks before winter arrives in less than two months.
Despite the rise in European gas prices, they are still below the record levels recorded in the aftermath of the energy crisis left over from the Russian-Ukrainian war last year (2022), as Moscow was the main gas supplier to the old continent, then the West decided to punish Russia for its invasion of Ukraine with a package of measures. Economically, the energy sector was most affected by it.
The following chart – prepared by the specialized energy platform – shows Australia’s presence in the list of the largest exporters of liquefied natural gas:
How did the story begin?
On August 10, 2023, the American Chevron Corporation and the Australian “Woodside” announced negotiations with representatives of workers in the Australian liquefied gas sector, to prevent them from going on strike in 3 mega projects.
The affected gas platforms are the “North West Shelf” project of the Australian Woodside Company, and the “Gorgon” and “Whetstone” stations of the American Chevron Company.
The North West Shelf has an export capacity of 16.9 million tons per annum, while the Gorgon terminal is the second largest in Australia with a capacity of 15.6 million tonnes per annum, and the Wheatstone terminal has a capacity of 8.9 million tonnes per annum.
“Our members working at Woodside and Chevron are fighting to get what they deserve, which is a fair and reasonable deal as soon as possible, because they know those companies stand to lose hundreds of millions of dollars if the strike leads to a strike,” union spokesman Brad Gandy said. export slowdown.
For its part, Chevron announced, on August 10, 2023, that it is studying applications submitted by workers at the Gorgon and Wheatstone LNG terminals to the Fair Work Committee.
Chevron said through a spokesperson: “We will continue to dialogue with our employees and their representatives, in an effort to reach results that are in the interest of both employees and the company.”
Well-informed traders say that the Gorgon plant, which is run by the US company Chevron, has declined to sell liquefied natural gas in the spot markets due to the possible strikes.
This came after 99% of the workers at the offshore platforms that supply the North West Shelf terminal announced their intention to go on strike, following a vote announced on Wednesday 9 August 2023.
In order to start a strike, the approval of the Fair Work Committee must first be obtained, then the union members vote, and then the latter decides whether or not to continue the strike within 30 days, provided that the owners of the company are notified in advance.
The Fair Work Committee approved a strike by the offshore platform workers, and the unions agreed to call for a strike.
Then, on August 20, trade unions gave Woodside Energy a week before starting a strike.
Commenting on this, the Maritime Workers Union said that its members unanimously agreed to give the company a grace period of 7 working days, to start the strike on the second of next September, if it did not agree to the demands of the workers.
As of last Friday, August 18, the two sides had not yet reached an agreement, and a Woodside Energy spokesperson said that his company had not received notification of the strike.
The Australian company confirms that it always has plans to deal with potential disruptions, but it hopes that it will not be necessary in such a situation.
In turn, Leo Capucci, an analyst for liquefied gas affairs at the energy consulting company Energy Aspects, rules out reaching a decision without the support of the Maritime Workers Union, indicating that his posts on social media confirm that this is unlikely to happen.
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2023-08-22 15:35:50
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