(AUSTRALIA) – Strike action at two major liquefied natural gas (LNG) facilities in Australia, Chevron’s Gorgon and Wheatstone plants, has led to a surge in natural gas prices.
These walkouts, driven by disputes over pay and conditions, have raised concerns as Chevron’s facilities represent over 5% of global LNG capacity.
In response to the news, UK wholesale gas prices experienced a roughly 10% increase.
Gas price hike moderate, No need to panic
Analysts from Engie EnergyScan noted the price hike but characterized it as moderate, emphasizing that the situation hasn’t reached the point of supply disruption.
They advised against panic, highlighting the overall bearish nature of other market fundamentals.
Australia is among the world’s largest LNG exporters, alongside Qatar and the US, and its contributions have helped stabilize global energy prices, especially following Russia’s reduction of natural gas supplies to Europe.
Mediation talks hosted by Australia’s Fair Work Commission between Chevron and the Offshore Alliance, representing energy workers, have yet to resolve the issues.
Both sides remain apart on key terms, with the Offshore Alliance seeking Chevron’s flexibility to settle the dispute.
While wholesale energy costs have decreased since Russia’s Ukraine invasion, pressure on prices persists. Oil prices recently rose, with Brent crude trading near $90 per barrel, driven by Saudi Arabia and Russia’s decision to extend supply cuts through the year.
Liquefied natural gas (LNG) is methane or a mixture of methane and ethane that has been purified and cooled to approximately -160°C to turn it into a liquid, enabling transportation in pressurized tankers before being converted back to gas for various uses.