UPDATE 4-Chevron, Woodside in talks to avert Australian LNG strikes

In This Article:

*

Woodside Northwest Shelf workers vote overwhelmingly to strike

*

Union has yet to decide whether to initiate industrial action

*

Chevron in talks with Gorgon, Wheatstone LNG plant workers

*

European prices retreat, Asia spot LNG prices stable

(Updated with European gas prices and Korean tender, in paragraphs 3,8 and 9)

By Renju Jose, Lewis Jackson and Marwa Rashad

SYDNEY/LONDON Aug 10 (Reuters) - Chevron and Woodside Energy Group are holding talks with unions, they said on Thursday, to avert threatened strikes over pay and conditions at facilities that together supply about 10% of the liquefied natural gas (LNG) market.

Concerns over industrial action at Woodside's North West Shelf offshore gas platforms and Chevron's Gorgon and Wheatstone LNG plants sent European gas prices to a nearly two-month high on Wednesday.

Dutch and British wholesale gas prices retreated on Thursday from a two-month intraday high the previous day after concerns faded over tight liquefied natural gas (LNG) supply due to possible strikes at Australian facilities.

Any industrial action would disrupt Australia's LNG exports and increase competition for the super-chilled fuel, forcing Asian buyers to outbid European buyers to attract LNG cargoes.

Japanese and South Korean firms are the biggest buyers of LNG from the North West Shelf project, while LNG from Chevron's Gorgon and Wheatstone plants mostly goes to Japan.

About 99% of workers at offshore platforms that supply gas to the Woodside-operated North West Shelf LNG plant, Australia's biggest LNG plant, backed industrial action in a vote whose results were made public on Wednesday.

The unions have not yet called for action, which could range from a minor pause to an all-out strike, and workers at Chevron's Gorgon and Wheatstone plants have yet to vote on industrial action.

Asian spot LNG prices barely moved on Thursday. Meanwhile, industry sources said South Korea's Korea Midland Power Co (KOMIPO) issued a tender for one LNG cargo for delivery of 1.6 trillion British thermal units (tBtu) in October.

"With the implied risk and potential volatility from Australian strikes, this might signal to others that it's time to book for Oct. onwards in anticipation of unknown pricing spikes," said Toby Copson, global head of trading at Trident LNG.

The Offshore Alliance umbrella group of unions said bargaining meetings for improved pay will continue on Thursday and next Tuesday before it takes a final decision on a strike at Woodside's facilities.

"Our members at Woodside and Chevron are fighting for what they deserve, a fair and reasonable agreement as soon as possible as they are well aware of the hundreds of millions of dollars these companies will lose if protected industrial action slows exports of Australian gas," union spokesperson Brad Gandy said.