INPEX sees 'imminent disruption' to Ichthys LNG production amid strike

INPEX expects "imminent disruption" to production at its operated Ichthys LNG project in Australia, as Australian unions extend their strike action through July 6, INPEX Senior Vice President Corporate Bill Townsend told Platts, part of S&P Global Energy, on June 16.

"Despite these ongoing discussions, further protected industrial action has been notified today by the unions to extend the current period of industrial action at Ichthys LNG to 6 July 2026," Townsend said in an emailed statement.

Protected industrial action by Australian unions, including the Offshore Alliance -- a partnership between the Australian Workers' Union and the Maritime Union of Australia -- began May 27, with more significant forms of action starting June 11.

"While mitigation efforts are underway, we anticipate imminent disruption to production at both onshore and offshore Ichthys LNG facilities," Townsend said. "In the context of current global fuel supply constraints, the disruption is expected to be significant."

INPEX continues to engage in enterprise agreement negotiations in good faith and is committed to reaching an equitable and sustainable agreement with employees, Townsend said, adding that an updated offer is being prepared following interest-based bargaining over the weekend.

"INPEX remains focused on maintaining safe operations at Ichthys LNG, and, importantly, is making every effort to ensure reliable energy supply to the Northern Territory and our key trading partners in the Indo-Pacific region amid ongoing global market disruption," Townsend said.

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

A spokesperson for JERA, which procures 1.54 million mt/y of Ichthys LNG, said June 16, "The [Ichthys LNG] cargo destined for us has not been particularly affected to date, and we have not carried out any alternative procurement."

"I haven't heard of anyone buying spot [LNG] cargoes due to the Ichthys strike yet," a Singapore-based trader said.

METI response

Japan is working to ensure a stable summer LNG supply by coordinating with INPEX and power and gas utilities amid the ongoing strike at Ichthys LNG facilities, Minister of Economy, Trade and Industry Ryosei Akazawa said June 16.

"We intend to continue to work closely with INPEX, as well as electric power and gas companies, so that there will be no disruption to the stable supply of electricity and gas this summer," Akazawa told a press conference in Tokyo.

"With regard to the impact on our country's supply arising from the progression of the strike, we are currently examining the situation in detail," Akazawa said.

The INPEX-chartered Symphonic Breeze arrived at the Ichthys LNG terminal at 0149 GMT on June 16, according to S&P Global Commodities at Sea data. Earlier, the Archy Vanguard departed the terminal near Darwin at 0752 GMT on June 11 following its arrival at 0221 GMT on June 10, CAS data showed.

The latest LNG carrier arrival comes as Australia's Fair Work Commission Deputy President Michael Easton said June 14 that the Ichthys onshore facility would reach tank top on June 16 if INPEX does not take steps to slow the flow through the relevant tanks.

The FWC on June 14 dismissed INPEX's application seeking to suspend protected industrial action at its Ichthys LNG facilities, following a hearing on June 13.