Initial LNG Strike Impact Could be Muted but Risk to Winter

The impact on LNG supply to Europe from potential strikes at Chevron’s LNG plants in Australia could be muted at first but an extended period of industrial action is a risk heading into the winter heating season. The plants produce around 6% of global supply according to ICIS.

• Employees plan work stoppages of up to 11 hours in two blocks and will stop performing certain tasks until at least 14 September, the Offshore Alliance union said.
• Facilities showed no signs of disruption to their capacity thresholds of 4-5 weekly cargoes at Gorgon and 2-3 at Wheatstone according to Kpler. “While strikes are meant to ratchet up over time, our current base case is that an agreement will be reached,” said Ana Subasic at Kpler.
• “We don’t expect that much to be lost immediately,” said Alex Froley from ICIS.
• Strikes are also unlikely to cause full shutdowns due to the complexities and timescales required to complete such process. The planned industrial action schedule at the Gorgon and Wheatstone facilities would disrupt 20% of output of affect 1.5% according to ICIS estimates last week.