The Pluto 2 LNG project, led by Woodside Energy, could face a delay in its completion if regulators allow workers at the site to go on strike. Unions applied for a strike license this week, with industrial action planned for the next couple of months.
The union, Offshore Alliance, is in a salary dispute with the contractor building the facility, Bechtel, and they have so far failed to reach an agreement, leaving only the option of industrial action, according to the union. It says, as quoted by Reuters, workers at Pluto 2 get paid 30% less per hour than workers at Chevron’s Wheatstone LNG facility.
Bechtel earlier offered workers a 5% salary rise but the overwhelming majority of them rejected the offer, leaving matters in the hands of the Australian Fair Work Commission, which is the authority with the power to greenlight the strike.
This would set back the project, which is 91% completed and was scheduled to start producing and shipping liquefied gas in the second half of next year. Pluto 2 is an expansion on the Pluto LNG project, which sources natural gas from the Scarborough gas project, operated by Woodside. The expansion has a capacity of 5 million tons of LNG annually and construction began back in 2022. The original Pluto facility has so far delivered more than 500 LNG cargos, Woodside said.
The Australian energy major is among the biggest global players in LNG. It said earlier this month it expected its sales of crude oil and natural gas to rise by some 50% by 2032, driven by growing demand for energy, especially in Asia.
Growing at an annual rate of 6%, sales could hit 300 million barrels of oil equivalent in 2032, chief executive Meg O’Neill said at the company’s Capital Markets Day. As a result, net operating cash flow is also expected to increase by 6% annually to 2032, to $9 billion, from $5.8 billion in 2024.
Growth will be especially pronounced in LNG, where Woodside expects its capacity to increase from 19 million tons annually in 2024 to as much as 40 million tons in 2032.
By Irina Slav for Oilprice.com
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