In a significant development, energy powerhouse Chevron, in collaboration with unions, has reached an accord to conclude strikes at two major liquefied natural gas (LNG) facilities in Australia.
The Offshore Alliance, a consortium of two unions, confirmed that workers have accepted a proposed agreement presented by the nation's labor regulator. As a result, ongoing industrial action will be put on hold, stated a union spokesperson.
Since September 8, labor strikes have been underway at the Gorgon and Wheatstone facilities, centered on issues related to compensation and working conditions.
Brad Gandy, a spokesperson for the Offshore Alliance, stated, "At a late night mass meeting members endorsed the latest offer which incorporates the Fair Work Commission's recommendations."
Australia's industrial arbitrator, the Fair Work Commission, facilitated mediation discussions between the company and union representatives.
Mr. Gandy further added, "The Offshore Alliance will now work with Chevron to finalize the drafting of the agreement and members will soon cease current industrial action." Chevron Australia has not yet responded to the BBC's request for comment.
Chevron's Gorgon and Wheatstone plants, located in Western Australia, constitute over 5% of the global LNG capacity. The labor dispute triggered volatile trading in LNG markets, raising concerns about potential impacts on global gas supplies.
The world's energy markets have been under strain since Russia's incursion into Ukraine last year. This led to a surge in oil and gas prices, resulting in a steep increase in energy costs for households and businesses.
The Kremlin also curtailed natural gas supplies to Europe, prompting countries to seek alternative energy sources. Many nations have turned to LNG to bridge the gap.
Australia, alongside Qatar and the US, ranks as one of the largest LNG exporters globally. Its supplies have played a pivotal role in stabilizing global energy prices.
Energy industry expert Saul Kavonic commented on the situation, noting, "It was quite remarkable that a few hundred workers offshore Western Australia have managed to roil global markets and cause tens of billions of dollars in market movements." He pointed out that this occurred due to a lack of resilience in the global gas system.
LNG, composed of methane or a mixture of methane and ethane, undergoes a purification process to remove impurities. It is then cooled to around -160°C, transforming it into a liquid form that can be transported in pressurized tankers.
Upon arrival at its destination, LNG is converted back into gas and utilized for heating, cooking, and power generation, akin to conventional natural gas.