Labor Unrest Threatens to Roil Australian LNG Export Projects
(Bloomberg) -- Australia’s liquefied natural gas sector is facing the prospect of industrial action at major export operations, adding another supply risk for Asian buyers already scrambling for cargoes after disruptions in the Middle East.
A dispute over wages and conditions involving maintenance contractor UGL Ltd. is set to trigger action from Wednesday at Woodside Energy Group Ltd.’s Karratha Gas Plant and Pluto facilities, the Offshore Alliance union said in a Facebook post. Separately, workers at Inpex Corp.’s Ichthys project are set to strike unless a final Fair Work Commission-facilitated bargaining meeting scheduled for Friday results in an agreement.
The moves echo those preceding strikes at Chevron Corp. facilities in Australia that caused a surge in global natural gas prices in 2023. They come as disruptions in the Middle East curb LNG flows through the Strait of Hormuz and intensify competition for alternative cargoes, with Australian producers already running close to operational limits.
Woodside’s Karratha Gas Plant has export capacity of about 14 million tons a year, while Pluto LNG can produce about 5 million tons and is being expanded with a second train of about the same capacity. Ichthys accounts for about 2% of global supply, with capacity to ship around 9.3 million tons a year, mainly to Japan.
UGL declined to comment. Woodside said it respects contractors’ rights to strike and that “any potential protected industrial action involving UGL employees will be managed by UGL.”
Inpex “continues to actively engage in the bargaining process,” the company said last month.
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