Australia Workers' Union votes in favor of protected industrial action against Chevron

The Australian Workers' Union on Aug. 24 voted in favor of protected industrial action at Chevron’s Wheatstone downstream and Gorgon LNG facilities, endorsing a range of outcomes including short-term to longer-duration work stoppages.

According to a document seen by S&P Global Commodity Insights, 98.4% of the workers who participated in the PIA Ballot voted for unlimited stoppages in work performance over a duration of 12 hours at Chevron Gorgon. Meanwhile, 100% of the participants voted for an indefinite ban on the performance of overcycle work at the facility, the document showed.

Out of 253 total eligible voters, 249 voters participated and answered 98.4% of all 22 questions, according to the document.

In a separate document also seen by S&P Global on the day, 100% of workers who participated in the PIA Ballot voted for unlimited stoppages in work performance over a duration of 12 hours at Chevron Wheatstone downstream. All participants also voted for an indefinite ban on the performance of overcycle work at the facility, the document showed.

Out of 188 total eligible voters, 184 voters participated and answered 97.9% of all 23 questions.

The vote endorsing industrial action, however, does not mean that strikes at Chevron’s two LNG projects are imminent. After the ballot closes, the unions will still need to take a decision on whether to proceed with the strikes within a fixed number of days.

This will give the workers’ unions and Chevron additional time to continue their negotiations and work out a solution. If the two sides do not come to an agreement, the unions will have to provide a notification to Chevron well ahead of the commencement of the strikes, which could be several weeks later and could include a wide range of actions.

A Chevron Australia spokesperson told S&P Global Aug. 24 that the company was aware "employees at the Gorgon and Wheatstone onshore gas facilities have voted in support of industrial action as part of a ballot organized by their representatives."

"While we don’t believe that industrial action is necessary for agreement to be reached, we recognize employees have the right to take protected industrial action and we will continue to take steps to maintain safe and reliable operations in the event of disruption at our facilities," the spokesperson said, adding that Chevron will continue to work through the bargaining process to reach outcomes that are in the interest of the company and its employees.

The Chevron-operated Wheatstone Project is among Australia’s largest resource developments and the nation’s first LNG hub. The Wheatstone Project has a capacity of 8.9 million mt/year and a domestic gas plant, while the Gorgon Project comprises a three-train, 15.6 million mt/year LNG facility and a domestic gas plant with the capacity to supply 300 Tj/d of gas to Western Australia.

The PIA Ballot for Chevron's Wheatstone offshore platform closes Aug. 28.

Australia is among the world’s top LNG exporters. Any supply disruptions emanating from the country have the potential to create a market imbalance and boost prices.

Asian spot prices have strengthened more than 25% over Aug. 1-23, reflecting fears of worker strikes at Woodside Energy and Chevron LNG facilities. Platts, part of S&P Global, assessed the October JKM at $12.769/MMBtu on Aug. 24.

Meanwhile, Woodside Energy on Aug. 24 in a statement said it had reached an in-principle agreement with the Australian Workers’ Union and Electrical Trades Union and other bargaining representatives on an enterprise agreement covering employees on its North West Shelf offshore platforms.