TTF gas slumps as Woodside reaches deal to avert Australian LNG strikes

Quantum Commodity Intelligence – Prompt European natural gas futures slumped heavily in Thursday trade after Woodside Energy reached a settlement with unions that will keep gas flowing from the company's huge North West Shelf project in Australia.

An agreement was struck after a mammoth negotiation session lasting well into the evening Wednesday, which unions had given as a deadline before calling for strike action, reported the Australian Financial Review.

The Offshore Alliance union, representing workers from two key unions, said on Thursday morning it endorsed the in-principle agreement reached with the energy giant at midnight after 15 hours of talks.

Benchmark TTF futures for Sep23 were trading around €32/MWh in late-afternoon European trading Thursday, a fall of around 12.5% from the previous day's close of €36.786/MWh, having opened Thursday's session around 20% down.

Prices had already tumbled 14% on Wednesday after the union's deadline for strike action passed, indicating progress during the negotiations.

Further along the curve, Oct23 was down 14% at around €35.75/MWh, while the key winter contracts for Jan24/Feb24 were 8.5% lower at around €51.5/MWh.

Woodside said in a statement the next steps will be for the 'enterprise agreement' to be finalised and then voted on by employees and approved by the Fair Work Commission.

"The unions have committed to not filing a Notice of Protected Industrial Action while that process is underway," it added. 

Industrial action by workers on the North West Shelf and possible strikes at Chevron's LNG plants in Australia could have impacted 10% of the world's LNG supplies at a critical time, heading into the northern hemisphere winter.

The threat to Australian gas supplies has not completely passed, with unions potentially calling for industrial action at Chevron's Gorgon and Wheatstone LNG facilities as early as next week.

As expected, Chevron staff unanimously voted for measures that could include industrial action in results released Thursday. However, analysts are hopeful the Woodside deal will smooth over talks between Chevron and the Offshore Alliance, which is also representing Chevron workers.

LNG found some support also following a disruption if gas flows to Cheniere Energy's Corpus Christi LNG plant after Tropical Storm Harold landed in South Texas.