In an escalation of an ongoing dispute over pay and conditions, unions at Woodside Energy Group’s North West Shelf offshore gas platforms have announced potential plans to strike as early as September 2. This move could significantly disrupt shipments of liquefied natural gas (LNG) from Australia, the world’s leading exporter. The Offshore Alliance, which includes the Maritime Union of Australia and Australian Workers’ Union, has declared its unanimous endorsement to give Woodside a seven-working-day notice to strike if its bargaining demands are not met by the close of business on Wednesday.

This looming industrial action is not taken lightly by the Offshore Alliance members, but they feel that Woodside is leaving them with little choice. A previous statement from a Woodside spokesperson stated that the company "continally engages actively and constructively in the bargaining process". However, the Offshore Alliance accuses Woodside of attempting to avoid collective bargaining and maintain a status quo that favours the company. The potential strike, endorsed by 99% of Woodside workers, could also inspire similar actions at Chevron’s Gorgon and Wheatstone LNG facilities, which together with Woodside’s facilities, supply about 10% of the global LNG market.

Potential Strike Threatens Australia’s LNG Exports

Unions at Woodside Energy Group’s North West Shelf offshore gas platforms have announced plans to potentially strike as early as September 2. This action could, in turn, disrupt shipments of liquefied natural gas (LNG) from top global exporter, Australia. The looming strike is seen as an escalation of a long-standing conflict between Woodside and its workers over pay and working conditions on its North West Shelf gas platforms, which power Australia’s largest LNG plant.

Australia’s Strike Notice Requirement and the Current Situation

In Australia, unions are legally required to provide companies with seven working days’ notice before initiating any industrial action. However, they retain the right to cancel any planned action within that period. The Offshore Alliance, a coalition of the Maritime Union of Australia and the Australian Workers’ Union, has confirmed plans to give Woodside the mandatory seven working days’ strike notice if its bargaining demands are not met by the close of business on Wednesday. This puts the earliest possible strike date as September 2.

The Offshore Alliance’s Standpoint

"Woodside tried every tactic it could think of to avoid bargaining with its workers as a collective, but in the end the company failed to maintain the status quo it liked – one where what the company says goes," Offshore Alliance spokesperson, Brad Gandy, said in a statement. He further emphasized that taking industrial action is not a decision their members take lightly, but they feel Woodside is leaving them little choice.

Woodside declined to comment on the potential strike action, simply referring back to a previous statement where they stated their active and constructive engagement in the bargaining process.

Possible Ripple Effects and Market Impact

The Offshore Alliance also represents workers at Chevron’s Gorgon and Wheatstone LNG facilities. Workers at these facilities started voting on Friday to decide whether to grant the unions permission to call for strike action. The first results of this vote are due by Thursday. The facilities operated by Woodside and Chevron combined account for approximately 10% of the global LNG market. As such, a strike could cause significant disruption, with fears it could stoke competition between Asian and European buyers for LNG cargoes. This uncertainty has already led to volatility in European gas prices.

Takeaways

The potential strike at Woodside’s and Chevron’s LNG facilities presents a significant risk to the global LNG market, given their combined 10% market share. Furthermore, it shows the importance of effective labor relations and collective bargaining in maintaining stable supply chains. It will be crucial for all parties to negotiate in good faith to prevent a potential disruption in the global LNG market.