CVX

Chevron Australia LNG workers escalate strikes, 24-hour stoppages possible

Credit: REUTERS/CHEVRON

By Renju Jose

SYDNEY, Sept 14 (Reuters) - Workers at Chevron's CVX.N two liquefied natural gas (LNG) projects in Australia plan to escalate industrial action from Thursday to anything from a total strike to hours-long work stoppages, their union said, increasing the risk of disrupted output from facilities accounting for over 5% of global supply.

Domestic supplies will not be impacted, the union said.

Dutch and British wholesale gas prices rose slightly on Wednesday, ahead of the strike escalation. NG/EU

SUPPLY RISKS

In a bid to stop the industrial action, Chevron is pursuing an untested legal strategy and has applied to the Fair Work Commission, Australia's industrial arbitrator, for an "intractable bargaining" declaration. If granted, it would end the strikes and allow the tribunal to dictate an agreement.

The commission will hold its first, and so far only, hearing on Sept. 22, and a decision is expected to be made soon after.

Goldman Sachs said in a note that any 24-hours a day strikes will raise supply risks, although chances of a long outage that could fuel a lengthy spike in gas prices were low.

"This is both because of the potentially large revenue losses to Chevron... and because of potential regulatory intervention," Goldman analysts said.

($1 = 1.5571 Australian dollars)

EXPLAINER-What can Australia's labour tribunal do in Chevron's dispute with LNG workers?

EXPLAINER-Chevron Australia LNG workers start strike. What happens now?

TIMELINE-Chevron LNG workers go on strike, threatening global supply

(Reporting by Renju Jose in Sydney; Editing by Jamie Freed and Miral Fahmy)

((renju.jose@thomsonreuters.com; +61 29171 7126; Reuters Messaging: @renjujose))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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