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The Offshore Alliance (OA), an Australian union group representing workers at Chevron's Western Australia LNG plants, has initiated discussions with Chevron staff in an effort to avert a strike planned to start on September 7.

These discussions, facilitated by Australia's Fair Work Commission, commenced on September 4 and are scheduled to continue until September 8, as confirmed by an OA spokesperson. The move comes after negotiations on pay and working conditions broke down last week, leading the OA to announce potential rolling stoppages, bans, and limitations from this week onwards.

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Chevron's Wheatstone LNG and Gorgon LNG facilities, with capacities of 8.9 million tons per year and 15.6 million tons per year respectively, witnessed workers overwhelmingly rejecting a company-proposed enterprise agreement on September 1. Chevron Australia emphasized its commitment to ensuring safe and reliable operations during any disruptions that may occur due to the industrial action.

The ramifications of potential industrial action at the Gorgon and Wheatstone facilities could extend globally, impacting around 6% of the world's LNG supplies, equivalent to approximately 1.5 million tons per month.

This scenario depends on the duration and severity of the strike, as highlighted by Australia-listed firm E&P Financial. Notably, LNG prices have experienced increased volatility since the OA commenced industrial campaigns at Chevron and at Australian independent company Woodside Energy, where a successful enterprise agreement has been accepted by workers.

While the strike's impact on LNG prices remains uncertain, E&P Financial suggests that prices could experience further declines. European gas inventories, at 93% capacity by the end of August, could potentially reach a record 98% by the onset of the European winter.

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The potential for elevated inventories and typical winter weather conditions could lead to storage inventories of 47% by the end of the winter season in 2023-24. However, extreme cold or unplanned outages could pose a notable upside risk to this projection.

According to the article by Procurement Resource, amid negotiations breakdown and the looming strike at Chevron's Western Australia LNG plants, the Offshore Alliance (OA) has engaged in discussions with Chevron staff, mediated by Australia's Fair Work Commission, to prevent the scheduled September 7 strike. Chevron Australia's commitment to operational stability during potential disruptions is clear.

A strike at Gorgon and Wheatstone facilities could impact up to 6% of global LNG supplies. While the influence on LNG prices remains uncertain, E&P Financial suggests potential further declines, considering European gas inventories and typical winter conditions. Unforeseen events could, however, alter this projection.