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Australian Workers Union plans Wheatstone platform demobilization from Sept 7


Chevron's proposed enterprise agreements not supported in ballot

Chevron lodges application with Fair Work Commission to seek mediation

Japan, China, Taiwan, S Korea key buyers of Gorgon, Wheatstone LNG

  • Author
  • Takeo Kumagai    Surabhi Sahu
  • Editor
  • Jonathan Fox
  • Commodity
  • LNG Natural Gas Oil

The Australian Workers Union plans to stage a series of industrial actions at Chevron's Wheatstone platform from Sept. 7, including demobilization of employees working at the platform, with an unlimited number of bans for an indefinite period on starting or restarting of wells, according to a detailed plan of industrial action seen by S&P Global Commodity Insights Sept. 1.

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The planned actions are part of the specific industrial action starting from Sept. 7, which also covers Chevron's Wheatstone downstream and Gorgon facilities.

The AWU members' plans state an unlimited number of bans for an indefinite period on employees working after 6 am Australian Western Standard Time (2200 GMT) on the day they demobilize from the Wheatstone Platform, starting 6 am AWST Sept. 7 until 6 am AWST Sept. 14.

The plans also includes an unlimited number of bans for an indefinite period on starting or restarting of wells from 6 am AWST Sept. 7 until 6 am AWST Sept. 14.

A Chevron Australia spokesperson declined to comment when asked whether the planned Wheatstone platform demobilization and the unlimited number of bans on starting or restarting of wells would affect the platform production.

"Although the demobilization's impact on production would largely depend on types of works, if it covers staff directly involved in production operation, we cannot rule out a possibility of seeing an impact on natural gas supply from the platform," said Takayuki Nogami, chief economist at Japan Organization for Metals and Energy Security, or JOGMEC.

The unlimited number of bans to start or restart wells at the Wheatstone platform could also affect gas supply from the platform should it lead to a restriction on gas production, Nogami added.

The Wheatstone platform industrial action also covers an unlimited number of bans for an indefinite period on any work to facilitate bunkering activities, other than diesel or water, over 6 am AWST Sept. 7 until 6 am AWST Sept. 14.

It also covers the execution of maintenance work instructions, integrity critical maintenance work instructions, production work instructions and standard operating procedures, including temporary operating procedures over 6 am AWST Sept. 7 until 6 am AWST Sept. 14 at the Wheatstone platform.

The other plans at the Wheatstone platform include stoppage of work, starting with 30 minutes to 1 hour for three hours from Sept. 7 to four hours each day in the following days to Sept. 13, with an hour Sept. 14.

Similarly, hourly work stoppages are also underway at the Wheatstone downstream and Gorgon facilities, including a ban on accepting transfers to any worksite other than the facilities.

EA ballot

The AWU's industrial action plans came after Chevron did not reach enterprise agreements with its Gorgon and Wheatstone Downstream employees, following voting slated for Aug. 30-31.

According to documents seen by S&P Global, 100% of the workers who participated in the EA ballot voted not to accept Chevron's proposed Gorgon EA, while 99% of the voters rejected the Wheatstone EA.

Of the Gorgon EA ballot, 260 voted for rejection with one acceptance for the total of 261 votes, accounting for 96.7% of participation of the total of 270 eligible voters.

For the Wheatstone Downstream, 186 votes declined Chevron's EA proposal with acceptance of two votes for the total of 188 votes, or 94% of participation of the total of 200 voters.

"Chevron Australia confirms the proposed Enterprise Agreements for the Gorgon and Wheatstone onshore facility were not supported by employees," the spokesperson said.

"Similar to the opportunity we provided Wheatstone Platform employees, the vote was part of the bargaining process and an important step which enabled employees to share their views."

"Following the outcome of the various Enterprise Agreement votes, we're looking to narrow points of difference with employees and their representatives through further bargaining mediated by the Fair Work Commission," the spokesperson added.

"To progress this, we have lodged an application with the Fair Work Commission to seek mediation assistance, through an application to deal with a bargaining dispute."

With no meeting scheduled with the Offshore Alliance, Chevron has applied to the Fair Work Commission to seek assistance in dealing with the dispute, the Offshore Alliance said in a statement.

"After this humiliating result at the ballot box with proposed enterprise agreements that Chevron touted as a potential solution to the ongoing dispute, Chevron's only real option is to change tack and take our members claims seriously," Offshore Alliance spokesperson Brad Gandy said in a statement.

Chevron's EA ballot came after the Offshore Alliance -- the alliance of the AWU and the Maritime Union of Australia -- said Aug. 29 that its members would be "participating in rolling stoppages, bans and limitations" as part of its protected industrial action at Chevron's three west coast facilities from Sept. 7.

Project exposure

The Chevron-operated Gorgon and Wheatstone projects are among Australia's largest resource developments. The Gorgon Project comprises a three-train, 15.6 million mt/year LNG facility and a domestic gas plant, while the Wheatstone Project has a nameplate capacity of 8.9 million mt/year of LNG and a domestic gas plant.

The Japanese buyers are foundational customers for the Gorgon and Wheatstone projects, with Japanese LNG lifting volumes accounting for 30% of the Gorgon output and 83% of Wheatstone output, according to S&P Global calculations based on industry information.

Gorgon and Wheatstone LNG together exported around 24.6 million mt of LNG in 2021 and 27.5 million mt in 2022. They have exported around 17.4 million mt of LNG so far this year, according to S&P Global data.

In 2022, around 46% of Gorgon and Wheatstone's LNG exports were sent to Japan, followed by 15% each to China and South Korea and around 14.4% to Taiwan. The remainder went to Singapore, Thailand and India.

So far this year, Japan has accounted for 46.6% of total LNG exports from the Gorgon and Wheatstone projects, followed by China at 15%, Taiwan at 13% South Korea around 9%, Thailand 8%, Singapore 5.3% and the remainder to other Asian countries.