A weeks-long strike action at the Ichthys LNG facilities in Australia is coming to an end after trade unions and Japanese energy company Inpex reached an agreement on pay and benefits.
More than 430 members of the Offshore Alliance, AWU, and ETU trade unions early on Wednesday endorsed a settlement with Ichthys LNG operator Inpex, ending the dispute that on Tuesday had shut down Train 1 at the facility, Offshore Alliance said.
The end of the industrial action, which began on June 3, comes as a relief to the global LNG and gas markets, which have been scrambling for summer spot supplies amid the production halt in Qatar and the closure of the Strait of Hormuz.
The dispute has cost Inpex one Train shutdown at Ichthys, as well as two Conde tankers, and an LNG carrier that didn’t load gas and condensate supplies, Offshore Alliance said. The cost of the lost production is estimated at US$141 million (AUS$200 million), according to the union.
“It is a dispute which should have been settled months earlier, had there been a different approach to negotiations,” Offshore Alliance said, adding that “the final bargaining outcome is a credit to all parties who have settled their differences and negotiated agreed industrial outcomes.”
A ballot of union members on the new collective agreement will be held soon, the trade unions said.
On Tuesday, when the strike was still ongoing and effective, Bill Townsend, senior vice president corporate at Inpex, said in emailed comments to Bloomberg, “We anticipate imminent disruption to production at both onshore and offshore Ichthys LNG facilities.”
The industrial action that started on June 3 has already disrupted some LNG loadings at the Ichthys LNG project in recent days. It raised market concerns that supply from Australia could drop in the coming days and weeks.
This is now avoided, and the gas markets as of Wednesday breathed a sigh of relief, also because buyers and traders expect Qatar’s LNG supply to begin returning after the tentative U.S.-Iran deal and the expected imminent reopening of the Strait of Hormuz.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com
- US Crude Oil Inventories Down Again, Losing 52 Million Barrels in 9 Weeks
- Dubai and Murban Crude Signal End of Middle East Supply Crunch
- ConocoPhillips Set to Become First U.S. Major to Sign Post-War Syria Gas Deal
