Gas Prices Rise Further As Australian Dispute Continues

European LNG prices rose a further 5.5% on Monday to be up 11.1% since Thursday’s close, as disruption from initial industrial action at Chevron’s Australian Gorgon and Wheatstone facilities continues. Prices reached a peak of EUR 37.95 early in the session and closed sat EUR 36.40, still subdued levels. North Asian prices are up only 0.5% since Thursday, as they continue to expect a resolution.

• Today Chevron will apply for an intractable bargaining declaration (IBD) at a hearing before the Fair Work Commission (FWC), which the unions have said they will oppose. The Union Alliance wishes to continue striking until it has reached a deal with Chevron. The FWC can make an IBD if bargaining has been taking place for a minimum of nine months and if “there is no reasonable prospect” that a deal will be reached without one and it will replace an enterprise bargaining agreement. 24 hour disruption is due to begin on Thursday.
• Rystad Energy says that 80% of capacity at Chevron’s North West Shelf facilities is exported to Northeast Asia and the energy company may be under pressure from buyers. 16% of Japan’s supply comes from these fields according to EnergyQuest and almost half of Western Australia’s own supply.
• Maintenance continues to impact supply in Norway with work at the significant Troll field extended to today. European gas storage is at 94% and is expected to finish winter at 44% according to BloombergNEF.