The Australian Fair Work Commission has denied Inpex a request to stop a strike at the Ichthys facility that would affect production and exports at the 9.2-million-ton facility.
According to a Reuters report, the operator of Ichthys had applied to the labor regulator for a suspension of the industrial action amid persistent failure to reach an agreement with trade unions. The WTC, however, sided with the strikers, rejecting the Japanese company’s argument that suspension of normal operations at the LNG platform would affect the Australian economy adversely.
“I do not regard this to be a significant disruption. At least some of the previous production will not be lost as soon as the loading ban is lifted,” the deputy president of the Fair Work Commission, Michael Easton, said, as quoted by the publication.
Workers at Ichthys last week voted to escalate the strike action at all three sites to work stoppages of up to 8 hours per day, up from 4 hours at the beginning of the industrial action. The escalation began on June 11 in a development that could further tighten global gas markets, already tight because of the LNG export disruption in the Persian Gulf.
LNG prices in Asia are 75% higher than they were before the war between the United States and Israel against Iran began at the end of February. Now that the two appear set to make peace, hopes for a quick rebound in gas flows out of the Gulf have been rekindled—but it may be premature.
Qatar’s state firm QatarEnergy expects the damage to the Ras Laffan LNG complex, the world’s single largest LNG-producing facility, to cost it about $20 billion per year in lost revenue and to take up to five years to repair. This means a full resumption of Qatari LNG flows is highly unlikely, making supply from elsewhere, including Australia, more important for global markets.
By Irina Slav for Oilprice.com
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