Strikes in Chevron owned Australian LNG facilities trigger wholesale gas price increases

Strike action at two key LNG facilities in Australia has today had an impact on the wholesale price of gas as the markets worry about the long term impact on LNG supply capacity.

Prices have jumped today as the walkout begins and unions try to negotiate a better pay deal with the plants owners Chevron. The LNG facilities in this area of Australia account for an estimated 10% of global LNG shipments and is one of the worlds largest exporters, supplying high usage countries in the far east including China.

A Chevron spokesperson commented on the the strike action, stating, “Unfortunately, following numerous meetings and conciliation sessions before the Fair Work Commission, we remain apart on key terms.

“The unions continue to seek terms that are above and beyond equivalent terms with others in the industry, including in agreements recently reached.”

Why do wholesale gas prices jump in UK markets when the strike action is on the other side of the world?

Since Russia turned gas pipelines off to Europe shortly after it invaded Ukraine in September 2022, LNG has been the primary alternative to fill the void, so if there is a threat to LNG supply the markets will react quickly.

At a time when European gas storage levels are at over 90%, they will want to carry on importing LNG at a good rate to hit maximum capacity in preparation for the colder winter months ahead.

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