A strike threat at one of Australia’s biggest LNG facilities, Ichthys, has been averted after the trade union organizing the industrial action reported progress on negotiations with operator Inpex on pay and working conditions.
Reuters reported the news earlier today, in a welcome development for both Australia and Japan, to which Australia is the biggest supplier of liquefied natural gas.
The Offshore Alliance, a coalition of two trade unions, earlier this month notified Japan’s Inpex that a strike may be imminent at the company’s Ichthys LNG project. “We have made it clear to Inpex that we aren’t going to cop the short-changing of our bargaining claims simply because Inpex could not be bothered reading our claims for six months,” a spokesperson for the Offshore Alliance said in a statement on May 18.
The trade unions also planned a strike at another major LNG facility, Woodside’s North West Shelf, which was expected to also affect a neighboring platform—Pluto LNG. The industrial action would have disrupted exports from one of the world’s biggest LNG exporters in a time of a worsening supply crunch, just as QatarEnergy said it would extend the force majeure on its own LNG exports until August.
Meanwhile, the Australian government indicated it could also interfere with exports via its so-called Domestic Gas Reservation scheme, aiming to secure sufficient gas supplies for domestic consumption, even if it means reducing export flows. Earlier this month, Kanberra said it would include existing export contracts in the scheme should the need to divert flows to the domestic market arise.
Under the framework, export approvals for LNG producers will be required from July 1, 2027, after companies prove that they have met their domestic supply obligation. The new domestic supply obligations in Australia will come at a time when the global LNG supply is set to be much tighter than expected before the Middle East conflict.
By Irina Slav for Oilprice.com
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