Mediation Talks Begin to Avert Strikes at Chevron’s LNG Facilities in Australia
SYDNEY, Sept 4 – Mediation talks have commenced to prevent strikes at the two major liquefied natural gas (LNG) facilities owned by U.S. energy company Chevron in Australia. The negotiations, aimed at averting strikes scheduled for Thursday, began on Monday and will continue throughout the week if no deal is reached.
The Fair Work Commission (FWC), Australia’s industrial umpire, is facilitating the talks, which are taking place in the Western Australia state capital of Perth. The discussions are being hosted by a senior member of the FWC, as first reported by Reuters on Friday.
Chevron Australia expressed hope that the mediated bargaining sessions would help “narrow points of difference” between the company and its employees. Last week, Chevron employees overwhelmingly rejected a pay and conditions deal that was presented directly to them by the company, bypassing unions.
The status of the talks with the Offshore Alliance, a coalition of two unions representing the employees, has not been disclosed. The negotiations are not open to the public or the media.
If a resolution is not found, industrial action is set to begin at 6.00 am local time on Thursday at Chevron’s Gorgon and Wheatstone projects. Combined, these facilities account for over 5% of global LNG production capacity. The planned work stoppages will occur in several time blocks and certain tasks will not be performed until at least September 14.
The union group has warned that these stoppages could cost Chevron “billions of dollars”. Prolonged industrial action could also disrupt LNG exports and create increased competition for the super-chilled fuel, potentially leading to Asian buyers outbidding European buyers for LNG cargo. China and Japan are the top two importers of Australian LNG, followed by South Korea and Taiwan.
Gorgon, Australia’s second-largest LNG plant with an export capacity of 15.6 million tonnes per year, and Wheatstone, with an export capacity of 8.9 million tonnes per year, are crucial to Australia’s position as the world’s biggest LNG exporter. The ongoing dispute has created volatility in natural gas markets, with concerns about potential long-term disruptions.
Notably, a similar dispute between the union alliance and Woodside-operated North West Shelf LNG facility, Australia’s largest, was resolved last month after workers approved a deal.
The outcome of the mediation talks will significantly impact the operations and competitiveness of Chevron’s LNG facilities in Australia. The talks will need to address the concerns of the employees and ensure a mutually beneficial agreement is reached. The Thomson Reuters Trust Principles will be upheld in reporting on this ongoing matter.
Reporting by Renju Jose and Lewis Jackson in Sydney; Editing by Christopher Cushing