The first warning signs emerged in early August with the news that industrial action could occur as early as 2 September at Chevron’s Gorgon and Wheatstone facilities and at offshore platforms supplying gas to the Woodside-operated North West Shelf LNG plant.
While Woodside Energy Group has managed to reach an agreement with trade unions in a bid to prevent the labor row from escalating,
Chevron has failed to do so, with workers at Gorgon and Wheatstone now planning a two-week total strike to begin on 14 September.
What risk could this pose to the Asia Pacific LNG market? Gas in Asia is likely to appreciate again. For now, prices are holding at $13 per million BTU, but things may change rapidly when the region is faced with a shortage of gas from strike-ridden plants. In August, 36% of Australia’s LNG output came from the Gorgon and Wheatstone plants, which together produced 3.2 billion cubic meters (see Fig. 4). The fallout from a strike action at these two facilities will not be felt keenly by China, which relies mostly on the Woodside-operated plant for LNG supplies. For Japan, by contrast, the situation looks more critical, with August supplies from Gordon and Wheatstone standing at 1.4 billion cubic meters, or 21% of the country’s LNG imports.