The Chevron factory in Gorgon is on strike.
(Photo: Bloomberg)
Sydney The two-week general strike that began on Thursday at two major LNG projects owned by the US energy company Chevron in Australia is likely to have an impact on global supplies, according to analysts. The strikes would increase supply risks as possible outages would require special forces on site to resolve them, analysts at Goldman Sachs said on Thursday.
However, the likelihood of a longer outage that could lead to a sustained increase in gas prices is low. “This is due to both the potentially high revenue losses for Chevron, the plant operator, which would be associated with a complete loss of LNG exports, as well as possible regulatory interventions.”
The research group EnergyQuest estimated the income at risk for Chevron and its partners due to the strikes was the equivalent of 45.6 million euros (76 million Australian dollars) per day. The trade union alliance did not immediately respond to a query from Reuters.
Australia is the world’s largest exporter of liquefied natural gas. The collective bargaining concerns wages and working conditions at Chevron’s Gorgon and Wheatstone plants, which account for more than five percent of global LNG production.
The main buyers of Australian liquid gas are in Asia. But traders say a supply disruption would increase competition as Asian customers would compete with Europe for cargo, leading to price fluctuations in the European gas market. Wholesale gas prices in the Netherlands and Great Britain rose slightly on Wednesday ahead of the strike planned for Thursday (local time).
More: Strike in Australia drives up gas prices