Chevron and unions fail to reach deal on LNG strike

Chevron’s unit in Australia and unions representing its workers on Gorgon and Wheatstone LNG export terminals in Western Australia have failed to reach a deal and end the strike actions.

Workers at Chevron’s Gorgon and Wheatstone LNG plants and the Wheatstone platform have started protected industrial action on September 8 after talks between the energy giant and unions ended without an agreement.

Moreover, the Offshore Alliance, which includes the Maritime Union of Australia and Australian Workers’ Union, provided Chevron with a notice that work bans may apply for up to 24 hours a day from September 14.

The Offshore Alliance said last Friday that “PIA has escalated today on the Chevron facilities and will continue to escalate over the coming days and weeks.”

Chevron has been trying to narrow points of difference with employees and their representatives through further bargaining mediated by Australia’s workplace tribunal Fair Work Commission.

The company recently asked the FWC to help resolve its ongoing dispute with unions and conciliation sessions continued this week.

“No agreement has been reached with the unions following further conciliation sessions held this week with the Fair Work Commission,” a Chevron spokesperson told LNG Prime on Wednesday.

“Chevron Australia engaged in meaningful negotiations in an effort to finalize the enterprise agreements with market competitive remuneration and conditions, however, the unions continue to ask for terms significantly above the market,” Chevron’s spokesperson said.

“The ongoing lack of agreement reinforces our view that there is no reasonable prospect of agreement between the parties,” the spokesperson said.

FWC to decide on strike

Since there is no agreement between Chevron and unions, the FWC will now decide whether to intervene and to end the action.

Chevron previously applied for intractable bargaining declarations for the Gorgon and Wheatstone downstream facilities and the Wheatstone platform with the FWC.

The Australian government inserted the intractable bargaining declaration provisions into the fair work act in June 2023 as a “circuit breaker” when there is no prospect of agreement between the parties.

The commission will hold its meeting on September 22.

Earlier this week, Chevron also said that it resumed full production at its 8.9 mtpa Wheatstone LNG terminal near Onslow after a fault reduced about 25 percent of the plant’s production.

The Gorgon LNG plant on Barrow Island has three trains and a production capacity of some 15.5 mtpa.

These two projects have a combined capacity of about 25.4 mtpa.

Japan’s Jera is the biggest buyer of Wheastone LNG volumes, while its compatriots Kyushu Electric and Tohoku Electric also take supplies from this plant.

Jera is also one the biggest buyers of Gorgon LNG volumes along with Japan’s Osaka Gas and Tokyo Gas, China’s PetroChina, and India’s Petronet LNG.

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