Australian LNG Strikes Would Need to Last Over a Month for Price Spike

Potential strikes at Australian LNG facilities would have to last for more than one month to cause significant spikes in global prices, as risks of curtailed supply have already been priced in, Bradley Churchman, an analyst with RBAC forecast firm, said.

• "If production was stopped for one month in the three plants, prices would remain relatively the same" in Asia, with only "a slight increase between September and November", Churchman said.
• “Because a strike-related LNG supply disruption would gave no clear end-date, and because how close we already are to next winter, we would expect European gas prices to look for the maximum amount of demand substitution away from natural gas, which would likely take TTF toward the 70-101 gas-to-oil substitution range”, Goldman Sachs said in a note.
• Recent LNG price increases in Europe are "likely overdone", with spreads between Europe and Asia potentially increasing if all three facilities went offline for more than a month, said Min Na, an analyst with consultancy Energy Aspects.
• The Australian LNG facilities threatening industrial action supply around 10% of global output.
• Markets are currently awaiting the outcome of ongoing discussions between Woodside and the unions, which could result in industrial action by 2 September.