TTF gas prices retreat as Chevron Australia staff stop short of walkout
Quantum Commodity Intelligence – Prompt European natural gas futures continued the recent volatility, as prices surrendered some of the past week's sharp gains amid uncertainty on output levels after unions representing Chevron's Australian workers in the gas sector notified the company of industrial action.
Unions have given notice they will initiate work bans and 10-hour daily stoppages at Chevron's Gorgon and Wheatstone LNG projects from next week and escalate the action in subsequent weeks, threatening global gas supplies heading into the peak northern hemisphere winter.
Benchmark TTF futures for Sep23 were around €35/MWh in late-afternoon European trading Tuesday, down over 8% on the day after prices had rallied again on Monday following the Chevron vote.
Further along the curve, Oct23 was also down over 8% at around €38/MWh, while the key winter contracts for Jan24/Feb24 were both down around 4% at close to €54/MWh.
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 possible strikes.
The Offshore Alliance – including the Australian Workers Union and Maritime Union of Australia – served Chevron late on Monday with protected action notices (PIA) at all three west coast facilities, beginning on 7 September.
The initial action avoids a complete walkout, which had been an option, albeit unlikely from the offset, while it is unclear how the 10-hour stoppages will impact production and operations.
"The serving of notice does not guarantee strike action, with both parties set to continue negotiations between now and 7 September. However, clearly, the risk of disruptions at both facilities, which have a combined capacity of 24.5mtpa (around 6% of global LNG supply) is growing," said Warren Patterson, head of ING's commodity research.
Woodside Energy last week reached a settlement with unions that will keep gas flowing from the company's huge North West Shelf project in Australia, which raised hopes a speedy deal could be struck with Chevron workers.
"It is set to cost Chevron their LNG exports as PIA starts to bite", said the union.
The notice was issued after a 100% 'yes' vote from all Alliance members on the three Chevron facilities.
