Prelude LNG Industrial Action Lingers - Pressuring Global Gas Markets

Shell has told workers on strike at its Prelude LNG facility in Australia it will stop paying them from Monday after industrial action was extended by two weeks.

• The industrial action was undertaken due to a pay dispute which has failed to be settled.

• Prelude, one of the world’s largest LNG export points, began shutting down last week because of the action. Shell told customers they would be unable to supply customers with LNG shipments while the industrial action was on-going.

• The action has been underway since June 10.

• "We will be resorting to lock outs as the mechanism available under the Fair Work Act. Once the lock outs are in effect, people will no longer be paid if they are not mobilised to the facility," a Shell spokesperson said.

• The situation adds further tightness to the global gas market with the major US LNG Freeport terminal out of action for months after a fire early June.

• Concerns in the EU gas market surround Nord Stream 1, which is expected to return to action tomorrow - but at limited capacity.

• TTF AUG 22 up 4.6% at 161.5€/MWh.

• US Natgas AUG 22 down -0.4% at 7.23$/mmbtu.