Gas prices set to skyrocket again? Australian LNG Union: Comprehensive strike to begin in mid-September

Recently, the labor dispute at Chevron Australia has escalated, with workers planning a two-week strike that could further exacerbate natural gas price fluctuations.

According to media reports, the Offshore Alliance, a union organization in Australia, stated on Tuesday that workers at Chevron's Wheatstone and Gorgon liquefied natural gas projects plan to hold a comprehensive two-week strike starting from September 14th, following partial strikes that began on September 7th.

A spokesperson for Chevron stated that employees at both plants voted against the company's proposed compensation plan, and the mediation negotiations facilitated by the Fair Work Commission did not go smoothly, leading to the union's decision to strike. The Offshore Alliance stated in its latest update that the shutdown period may last at least until the end of this month.

It is worth mentioning that Australia is the world's largest exporter of liquefied natural gas, and the Gorgon and Wheatstone projects accounted for approximately 7% of global liquefied natural gas supply last year, providing half of Western Australia's natural gas consumption.

According to Bloomberg New Energy Finance's report on the "Global Liquefied Natural Gas Winter Outlook," the two-week strike is expected to reduce Australia's liquefied natural gas production by 1.1 million tons.

Traders are concerned about the risk of prolonged disruptions, which could further impact the volatility of the natural gas market. Dutch and UK natural gas prices fluctuated on Monday, partly due to high storage levels suppressing short-term prices. Previously, workers at Woodside Energy, an Australian liquefied natural gas company, went on strike, causing European natural gas futures to surge by as much as 18%.

In a research report, ING Group pointed out:

The union's strike action may indicate a lack of progress in mediation, which could provide some support to natural gas prices. At the same time, maintenance work is being carried out at Norway's Troll gas field, which may result in a shortage of natural gas supply and further impact the European natural gas market.

Energy analyst Saul Kavonic believes that the union's strike action may result in reduced worker efficiency, and the risk of supply interruptions will increase over time.