TTF gas firms on Australia offshore strike vote, Germany LNG delays

Quantum Commodity Intelligence – Prompt European natural gas futures were holding at firmer levels Monday as possible strike action by Chevron's Australian workers threatened LNG supplies, while concerns were also growing over Germany's readiness for this winter.  

About 500 workers at Chevron's Gorgon and Wheatstone LNG processing plants were joined Monday by Wheatstone's offshore platform personnel, who also voted unanimously for protected action, including strikes.

Benchmark TTF futures for Sep23 were trading around €35.50/MWh in early-afternoon European trading Monday, up around 2% on the day after prices had rallied strongly on Friday following the first Chevron vote.

Further along the curve, Oct23 was also up around 2% at around €38.50/MWh, while the key winter contracts for Jan24/Feb24 were both steady at around €53/MWh.

Prior to Friday's rebound, TTF prices had come under pressure after Woodside Energy reached a settlement with unions that will keep gas flowing from the company's huge North West Shelf project in Australia.

According to analysts, industrial action from both sets of workers could slash global LNG supplies by 10%.

Woodside's NWS facilities have a capacity of around 16.7 million mt per annum (mtpa), while Chevron's Gorgon and Wheatstone have a combined capacity of 24.5 mtpa.

European benchmark prices had also rallied Friday after a planned LNG import terminal at Germany's Baltic coast risks delays and not being able to start this winter. 

Bloomberg reported German Economy Minister Robert Habeck cautioned there could be severe consequences if a second LNG terminal near the island of Rügen doesn't start operations this winter as planned.

"Gas supplies must be planned in such a way that deliveries are secured even in the event of particularly cold weather or supply bottlenecks via pipelines," said Habeck, who is also the country's Vice Chancellor, according to a letter seen by Bloomberg.

"There is a risk of incalculable price increases, supply bottlenecks and severe economic damage, which would hit eastern Germany in particular," he said, with the country pivoting away from Russia's pipeline gas.