Strike Action at Major Australian LNG Facility Raises Supply Concerns

Union workers at the Ichthys LNG project in Australia have started limited industrial action at the facility, threatening broader work suspension unless the wage dispute with employers is resolved soon.

The Offshore Alliance, a coalition of two trade unions, last 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.

Later, the media reported some progress had been made in the negotiations, but the latest reports suggest this has not led to a final agreement on wages. Reuters noted in its coverage of the developments that Ichthys accounts for a tenth of Australia’s total exports of liquefied natural gas.

For now, the workers will stop work for two hours in the morning and another two hours in the evening. Unless the wage talks yield results that satisfy the Offshore Alliance, a broader strike will begin on June 11 and last until June 23.

The industrial action will include a “ban on all activities associated with the preparation, connection, and loading of hydrocarbons (including LNG, LPG, and condensate) from the Bladin Point onshore storage tanks to an offtake carrier, excluding when an offtake has already commenced,” the unions said in a notice to Inpex, as cited by Reuters.

Ichthys LNG produces 9.3 million tons of the superchilled fuel annually, which makes any disruption in production and loadings a most unwelcome development for Asian importers, notably Japan. Japan is the world’s second-largest importer of liquefied natural gas due to its energy commodity scarcity. The country recently made a pivot back to coal because of the supply crunch in the Middle East.

By Irina Slav for Oilprice.com

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