Australian energy giant Woodside will attempt on Thursday to relaunch negotiations with its employees, in order to avoid a strike that is causing concern in a global market already weakened by the conflict in Ukraine.
LNG prices soar in Europe following strike call in Western Australia
Liquefied natural gas (LNG) prices soared in Europe on Wednesday, following the announcement of a strike call on the Woodside offshore platforms in Western Australia, which alone supply over 10% of the world’s LNG every month. On Wednesday, the Dutch TTF futures contract, considered the European benchmark for natural gas, soared by almost 27% to 39.24 euros per megawatt-hour (MWh), shortly after peaking at 43.545 euros per MWh, a high in almost two months. Although Europe has largely replenished its LNG stocks since the start of the conflict in Ukraine, markets fear that shortages and strong demand in Asia will increase pressure on European supplies.
Woodside hopes to prevent the strike, but has already put in place an emergency plan to secure its supplies.
“We hope that it will not be necessary to activate this plan,” explains the group, which wants to resume negotiations to prevent any work stoppage scheduled for mid-August.
Threat of joint Chevron-Woodside strike: West Australian LNG exports at risk
American competitor Chevron is also facing the threat of a strike by workers on its offshore platforms in Western Australia, called by the same powerful union, the Australian Workers Union (AWU). LNG exports estimated at “hundreds of millions of dollars” are under threat, the union warned.
“So it’s in everyone’s interest to get back to doing what staff do best, supplying the world with quality gas,” says AWU union spokesman Brad Gandy in a statement.
If negotiations fail, the union will have to give seven days’ notice before the strike. Last year, Prélude, the vast floating natural gas extraction and liquefaction complex controlled by Anglo-Dutch group Shell, was affected by a 76-day strike, which cost the group some 650 million US dollars in lost revenue.