Strikes loom at Chevron’s Australian gas plants

Picket lines may soon go up at two of Chevron’s biggest liquefied natural gas projects in Australia, Gorgon and Wheatstone. Talk of industrial action emerged after Offshore Alliance, a union, spurned a recent pay proposal. The union threatened to cost the supermajor billions of dollars: the plants made nearly $7bn last year, almost a fifth of Chevron’s total profit. A strike planned for Thursday has been delayed by at least a day, while the two sides negotiate.

Any strike would squeeze gas markets too. The facilities accounted for close to 7% of global LNG supply last year. A prolonged shutdown could bring its contribution offline. When news of potential strikes first broke in early August, European natural-gas prices shot up by almost 40%.

Chevron has assuaged investors’ fears for the moment. It says it can run the facilities with a skeleton crew for many months. Moreover, European storage is brimming with gas, helping soften prices. But that may change if workers hold the line.