TTF gas prices rally on Chevron LNG strike uncertainty
Quantum Commodity Intelligence – Prompt European natural gas futures were choppy again Thursday as the deadline for Chevron's Australian workers draws closer with the US energy giant and the Offshore Alliance so far failing to reach an agreement.
Benchmark TTF futures for Oct23 were around €33/MWh in late-afternoon European trading Thursday, up by 6% on the day, having regained some lost ground after prices tumbled around 10% in the previous session when unions postponed strike action for 24 hours until Friday.
The one-day extension for talks was initially seen as a sign that the parties were closing in on an agreement, but sentiment shifted back Thursday to likely strike action that could impact around 6% of the world's LNG supplies from Chevron's Gorgon and Wheatstone plants.
However, prices eased again after unions announced a further delay to planned strikes, which is now set to start 1pm local time, but then again rallied heading towards the close.
This was also seen as a further signal the two side were making progress, but analysts said there are still a number of areas to agree.
"The parties are still much further apart than where the Woodside negotiations were a week before the strike notices," Energy analyst Saul Kavonic told the Australian Financial Review, referencing the recent agreement between the Australian producer and unions.
If unions go ahead with strike action, it remains unclear how much volume will be impacted, but flows are likely to be initially reduced rather than completely shut in.
Earlier this week, the Wheatstone processing plant was said to have experienced a technical outage, having also being hit with problems in January that impacted supplies for several days.
Australia LNG production is already curtailed with Shell's troubled Prelude floating LNG plant off Western Australia under maintenance, which sources said could take several months.
In Europe, Norwegian gas supplies to Europe have been reduced due to extended maintenance or outages, including the offshore Troll field and Kollsnes processing plant.
