Shell reaches Prelude FLNG deal with unions

LNG giant Shell said it has reached an agreement with unions representing Prelude FLNG workers to end the strike and restart operations on the giant floating producer located offshore Western Australia.

Shell and Prelude employees have been in talks for a new enterprise agreement to agree new salaries for a while now.

The workers started protected industrial action on June 14 with a number of working bans.

Shell stopped production on July 11 on the giant unit due to additional working bans.

It recently also decided to postpone the FLNG’s scheduled maintenance.

“Shell is pleased to confirm an in-principle enterprise agreement has been reached with the Australian Workers’ Union and Electrical Trades Union in relation to the Prelude FLNG facility,” a Shell spokesperson told LNG Prime via email on Wednesday.

“Our strong preference was for this to be resolved through an agreement and confident this was the best outcome for our workforce,” the spokesperson said.

“The process to formally lift the work bans in place under the Protected Industrial Actions is expected to be completed shortly, which will enable the facility to commence the process to prepare for a hydrocarbon restart,” the spokesperson added.

The agreement will be submitted for formal acceptance, via a vote, to the in-scope Prelude employees within a week.

Moreover, the EA will then be submitted to the Fair Work Commission for approval.

More details to be revealed

“After 76 days of Protected Industrial Action by the Offshore Alliance and ETU members on the Prelude FLNG, we have reached an ‘in-principle’ agreement with Shell for an enterprise bargaining agreement,” the Offshore Alliance said in a social media post.

“We will provide more details of the bargaining outcomes later in the week but we are very, very proud of the men and women on the Prelude who fought for their union EBA,” it said.

According to the Offshore Alliance, “there has never before been an industrial battle in this country where an employer has lost $1.5 billion in production during an industrial dispute.”

Prelude shipped its first cargo in June 2019 after several start-up delays. The FLNG has the capacity to produce 3.6 mtpa of LNG, 1.3 mtpa of condensate, and 0.4 mtpa of LPG.

Shell operates the floating facility with a 67.5 percent stake. Japan’s Inpex holds a 17.5 percent stake, Korea’s Kogas 10 percent, and Taiwan’s CPC holds 5 percent.

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