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Chevron LNG labor strikes to begin in September, surging European natural gas prices

Pubdate:2023-08-30 15:27 Source:网络Bloomberg Click:

(Bloomberg) – European natural gas prices surged after Chevron Corp. said it has been alerted that strikes at its liquefied natural gas (LNG) export plants in Australia will begin from Sept. 7.

Unions gave notice for industrial action at the Gorgon and Wheatstone export plants, the company said Monday in an emailed statement. Chevron will “continue to work through the bargaining process as we seek outcomes that are in the interests of both employees and the company,” it said.

Benchmark futures rose as much as 10% after the news. The market has been on edge this month amid labor disputes in Australia — one of the world’s top producers of liquefied natural gas (LNG) — as strikes could limit global supplies during a crucial period as Europe prepares for winter.

Last week, prices whipsawed after another Australian exporter, Woodside Energy Group Ltd, made a breakthrough with unions, avoiding strikes that could have shut one of their plants. The latest news suggests it isn’t clear if Chevron will be able to do the same.

The move shows labor negotiations escalating one step further than was the case for Woodside, where workers reached a deal with the company and no strikes were notified. If walkouts in Australia do occur, disruptions could force Asian buyers to compete with Europe for replacement cargoes from the US or Qatar.

The region remains vulnerable to global supply disruptions after being hit by the worst energy crisis in decades last year. On top of strike risks, traders are also closely eyeing flows from Norway — Europe’s top gas provider — which have slumped to the lowest in more than a year amid seasonal maintenance.

Dutch front-month futures, Europe’s gas benchmark, traded 8.5% higher at €37.75 a megawatt-hour at 2:55 p.m. in Amsterdam.