BNR – Mediation discussions to prevent strikes at the two Chevron liquefied natural gas (LNG) plants in Australia have officially begun. This follows workers’ rejection of the company’s proposed terms on wages and working conditions last week.
A senior representative from the Fair Work Commission (FWC) is facilitating these discussions, which commenced at 9:00 AM in Perth. The schedule indicates that these talks will continue throughout the week.
Workers Reject Offer
The decision to pursue mediation was made after Chevron’s offer was overwhelmingly turned down by the workforce. Additionally, Chevron took the unusual step of directly presenting its offer to the employees, bypassing the involvement of labour unions.
In response, a coalition of unions has announced its intention to commence industrial action at Chevron’s Gorgon and Wheatstone projects. They said the action will persist until an agreeable resolution comes to the table.
Chevron’s Gorgon and Wheatstone projects are collectively responsible for over 5% of global LNG production capacity in Australia.
The proposed industrial action will involve work disruptions of up to 11 hours in two segments. Furthermore, there will be a halt to specific work tasks until at least mid-September, according to the Offshore Alliance union.
Potential Billions in Losses for Chevron
The union alliance warned that these disruptions could result in substantial financial losses for Chevron, amounting to “billions of dollars.” Such industrial action would not only disrupt Australia’s LNG exports but also intensify competition for LNG resources.
Gorgon is the second-largest LNG facility in Australia and has a yearly export capacity of 15.6 million tonnes. However, Wheatstone has a capacity of 8.9 million tonnes.
Indeed, Australia’s ongoing labour dispute has introduced significant volatility into natural gas markets. Industry players are expressing concerns about the potential for prolonged disruptions.
It’s worth noting that a similar dispute between the union coalition and the Woodside-operated North West Shelf LNG facility was resolved last month when workers approved an agreement.
