Australia’s Offshore Alliance says Ichthys strike action ‘will not be going away’

The Offshore Alliance maintained plans to strike at the INPEX-operated Ichthys LNG sites in Australia early local time June 11, as the trade union prepared to extend the industrial action to eight hours per day.

"Protected Industrial Action will not be going away simply because INPEX demands it happens," the Offshore Alliance, a partnership between the Australian Workers' Union and the Maritime Union of Australia, said in a Facebook post. "Our members are in this fight for the long haul and INPEX have once again overplayed their hand."

The development comes as INPEX is seeking an order from Australia's Fair Work Commission to consider spending the strikes. The commission is scheduled to hold a hearing on INPEX's request on June 12.

A supply disruption resulting from strikes at the Australian export plant could add to tightening supplies in the Pacific Basin as the war in the Middle East continues to constrain about 20% of global LNG supplies that normally transits the Strait of Hormuz.

The Ichthys project has a nameplate capacity of 9.3 million metric tons/year of LNG, 1.65 million mt/year of LPG and 100,000 barrels/day of condensate, with about 70% of LNG output destined for Japanese buyers, according to INPEX.

The Offshore Alliance and INPEX were not immediately available for comment June 11.

The Offshore Alliance, which is seeking pay increases and changes to working conditions, earlier said its workers had overwhelmingly rejected a series of last-minute offers from the Japanese company and voted to escalate protected industrial action from June 11. The union said its members endorsed extending strike action from four to eight hours per day.

Global LNG spot prices remain elevated and volatile amid the conflict in the Middle East, with the effective closure of the Strait of Hormuz now exceeding 100 days.

Platts, part of S&P Global Energy, assessed the July JKM benchmark price reflecting LNG delivered to Northeast Asia at $19.049/million British thermal units June 11, an increase of 14.2 cents/MMBtu day over day and still about 78% higher than prewar levels.