Workers at Chevron’s two major liquefied natural gas (LNG) facilities in Australia will undertake rolling stoppages, and bans and limitations on certain tasks, a union alliance said on Tuesday, in an ongoing dispute over pay and conditions.
Chevron’s Gorgon and Wheatstone projects account for more than 5% of global LNG production capacity, and news of the planned industrial action overnight sent European natural gas prices surging.
The union alliance late on Monday said they would take industrial action from Sept. 7.
“Members will be participating in rolling stoppages, bans and limitations which will escalate each week until Chevron agrees to our bargaining claim,” the Offshore Alliance, which combines the Maritime Union of Australia and Australian Workers’ Union, said in a Facebook post on Tuesday.
“It’s set to cost Chevron their LNG exports as (the industrial action) starts to bite.”
Unions last week warned work stoppages could cost the U.S. energy major billions of dollars if workers’ demands were not met.
A Chevron spokesperson declined to comment on the union’s latest position, referring to a previous statement that the company “will continue to take steps to maintain safe and reliable operations in the event of disruption at our facilities.”
Australia is the world’s biggest exporter of the fuel, which is used primarily in Asia and Europe for power and heating as many nations attempt to reduce their reliance on coal or oil.
Last week, the union alliance and Woodside resolved worker disputes at North West Shelf, Australia’s largest LNG facility, after negotiating higher wages and working conditions, averting industrial action.
Concerns of possible industrial actions at LNG facilities of Woodside and Chevron – which account for one-tenth of global supplies – had stoked extreme price volatility in global LNG markets in recent weeks.
The Dutch September natural gas contract, which was trading about 3.5% higher at around 36 euros per megawatt hour (MWh) before the news about the industrial action, spiked by a further 2.40 euros, or 10.4% from Friday’s close, to 38.40 euros.
(Reporting by Renju Jose in Sydney; Editing by Chris Reese and Shri Navaratnam)