2023-08-18 17:00:51
For once, the war in Ukraine is not, on its own, the cause of the very rapid rise in gas prices in Europe. They are up nearly 30% since the beginning of August. On the Dutch TTF index, which serves as a benchmark, the megawatt hour traded around €37, Friday August 18, for delivery in September.
Today, it is at the other end of the Earth, in Australia, that we find a large part of the explanation for this outbreak of fever. Since the beginning of August, the employees of four gas platforms managed by the Australian Woodside Energy and the American Chevron have been threatening to stop their work to obtain wage increases.
Stalled negotiations
Gathered in a general assembly on Wednesday August 16, the employees of Woodside Energy authorized their union, Offshore Alliance, to file a strike notice if their wage demands are not met. This decision was approved by 99% of voters. In the coming days, those of Chevron could do the same, although the company still says it wants to discuss.
While the Labor government supports the demands, the negotiations are at a standstill, and the tone rises. Offshore Alliance thus announced on Facebook, Thursday August 17, that it had lodged a complaint with the Australian offshore energy regulator, against the living and working conditions on the Angel platform, belonging to Woodside, which would threaten, According to him, security.
Half of gas production could be shut down
Australian unions know how to carry out their threats. Last year, Prelude, the floating gas extraction and liquefaction complex controlled by the Anglo-Dutch Shell, was affected by a seventy-six-day strike, which cost nearly 600 million euros.
This time, the conflict could be on a larger scale. Offshore facilities at Woodside and Chevron account for half of Australia’s gas production and 10% of the global liquefied natural gas (LNG) market. Admittedly, the molecules are mainly exported to China, South Korea and Japan, but a possible drop in deliveries could lead Asian buyers to buy more LNG from the United States or Qatar, thus driving up demand and prices. , to the detriment of Europe.
To attract LNG carriers, Europeans are ready to pay more
«In recent months, European LNG prices were lower than those in Asia, as the market was overcapacity. But they have now gone back above, in order to remain attractive enough to attract LNG carriers», explains Nicolas Leclerc, co-founder of the consulting firm Omnegy. He nevertheless defends himself against any alarmism, recalling that the storage sites are already almost 90% full and that gas consumption remains on the decline.
For most analysts, the current overheating of the market should remain temporary, the time that the social situation in Australia calms down. Unless the next winter is cold, which would help drive prices up. This is the main uncertainty, which also explains why futures prices remain high. «The markets have become very cautious, and the risk premium is now higher,” notes the boss of Omnegy. For delivery in the first quarter of 2024, the megawatt hour of gas is currently trading around €57, more than twice its 2021 level.
In France, with the end of the tariff shield on gas and the end of the regulated tariff, which have been effective since July 1, prices will now vary each month according to the evolution of prices on the market. Given the current trend, the bills for September and October could well be heavier than expected. And for companies that are going to renegotiate their contracts for next year, the task promises to be difficult.
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