Strike risks in Australia were fueling TTF price volatility since early August to its highest since Russia’s invasion of Ukraine.
As per latest news negotiations broke down between Chevron and the unions, paving the way to full strike action at the Gorgon and Wheatstone LNG plants.
The two plants equates to roughy 5% of global LNG supply, with a combined output close to 0.1 bcm/d.
The initial strike period would take 15 days between 14-29 Sep. A full stop would result in a loss of around 1.3 bcm of LNG supply.
It is unlikely that it will result in a full and immediate shutdown of operations.
This being said, Australian unions have a strong “strike record”. When Prelude FLNG went on strike it lasted over 70 days.
A strike with a similar duration would lead to a loss of 6.5 bcm of LNG supply, enough to tighten up the global LNG supply balance.
This would lead to a stronger competition for spot LNG cargos between Europe and northeast Asian markets, higher price levels and more volatile patterns.
What is your view? How will Australian strikes unfold? Could the Fair Work Commission save the day? What could be the impact on the winter gas balance?
Source: Greg MOLNAR
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