The full bench at a hearing of Australia's industrial tribunal Fair Work Commission decided Sept. 22 to adjourn Chevron's applications for intractable bargaining declarations for four weeks to finalize enterprise agreements with unions while confirming no further industrial action during this period.
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"It did so on the basis that it was informed that there would be no further industrial action during this period," the spokesperson said. "The Full Bench further advised the parties that Commissioner Riordan would be available to assist with the finalization of the enterprise agreements on request."
Chevron Australia, the Australian Workers' Union and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) all accepted the FWC's recommendation to resolve disputes at Chevron's onshore and offshore gas facilities in Western Australia.
"The unions have advised Chevron Australia and the Fair Work Commission that industrial action has been suspended," a Chevron Australia spokesperson said.
"The applications for Intractable Bargaining Declarations are adjourned to enable the process of finalizing drafting of the Agreements to occur before they are voted on by employees and, if voted up, submitted to the Fair Work Commission for approval."
Supply concerns ease
The news of Chevron and the unions having accepted FWC's recommendation and subsequent decision at the FWC hearing earlier Sept. 22 eased the regional supply concerns in Asia.
Many LNG buyer and supply sources in Asia said that they do not longer see issues over cargo nominations for Gorgon and Wheatstone LNG shipments.
"I would expect that Gorgon and Wheatstone wouldn't be excluded anymore from bilateral market discussions," said a Singapore-based trader.
"Prices could be lower on an outright basis, barring any [supply] outages. Japanese buyers in general are not worried because some have secured physical volumes in advance on fixed prices," the trader added.
"I don't think nominations of Gorgon and Wheatstone cargoes should be an issue any longer, but expect a selloff in TTF although not that much," a Japanese LNG importer said.
Platts JKM, the benchmark price reflecting LNG delivered to Northeast Asia, for the November derivatives contract was trading at $14.175/MMBtu at 3 pm Singapore Sept. 22, down from $14.539/MMBtu assessed at the London market close Sept. 21, according to S&P Global data.
The November Platts Dutch TTF was trading at $13.578/MMBtu at 3 pm Singapore time Sept. 22, with the JKM-TFU spread pegged at 60 cents/MMBtu.
FWC recommendation
The Offshore Alliance said earlier Sept. 22 that it has endorsed a recommendation from the FWC Sept. 21 to resolve disputes at Chevron's Gorgon and Wheatstone LNG facilities.
"The proposed enterprise agreements, which incorporate the Commissioner's recommendations, contain substantial improvements in terms and conditions of employment including increased remuneration, job security, locked-in rosters, career progression and returning all employees to a 40% roster," it said in a statement.
The Offshore Alliance, an alliance between the AWU and the Maritime Union of Australia, said it will work with Chevron to finalize the drafting of three agreements and members will soon cease the current industrial action.
Chevron had accepted Sept. 21 a recommendation from the FWC to resolve disputes with the unions.
The acceptance
of FWC's recommendation came ahead of a scheduled hearing from 10 am Australian Eastern Standard Time Sept. 22 (000 GMT) of Chevron's request for an intractable bargaining declaration on the matter.
The declaration has provisions that can act as a circuit breaker when there are no reasonable prospects of an agreement between disputing parties.
Industrial action
The Offshore Alliance started its protected industrial action at the Gorgon and Wheatstone LNG facilities Sept. 8 and had said its members would stop work completely for two weeks from Sept. 14.
Despite the industrial action, Chevron so far has maintained its scheduled LNG deliveries from Gorgon and Wheatstone, except for a recent brief fault at its Wheatstone Gas Facility that had cut LNG production to about 80% of usual rates.
Chevron resumed full production at the Wheatstone Gas Facility Sept. 17 after previously detecting a fault.
The Gorgon and Wheatstone projects are among Australia's largest resource developments. Gorgon comprises a three-train, 15.6 million mt/year LNG facility and a domestic gas plant, while Wheatstone has a nameplate capacity of 8.9 million mt/year LNG and a domestic gas plant.