After reaching an agreement with Chevron, the labor union representing the two Australian liquefied natural gas (LNG) factory workers of the energy giant cancelled the strike plan originally scheduled to resume on the 19th, thus ending a dispute that disrupted the global fuel market.
According to a statement from the Australian trade union organization Offshore Alliance, workers accepted Chevron's settlement plan on wages and working conditions on Tuesday and will not implement the strike action originally planned for Thursday.
The Offshore Alliance stated that workers will vote on the proposed agreement.
Previously, with the mediation of the Fair Work Committee (FWC), an Australian industrial arbitration body, the two sides held several days of negotiations in an attempt to improve a principled agreement reached in September.
Australia is one of the world's largest LNG exporters, with its main buyers in Asia. Chevron has two LNG plants in Australia, namely Wheatstone and Gorgon, which together account for approximately 5% to 7% of the global LNG supply.
Due to dissatisfaction with salary and working conditions, the workers of Wheatstone and Gao Geng announced a strike early last month. After reaching a preliminary agreement in the previous round of negotiations, the LNG union ended a strike that lasted for several weeks in late September. However, earlier this month, the union accused Chevron of violating certain commitments and announced last Monday that they would resume the strike on October 19th.
Offshore Alliance spokesperson Brad Gandy stated in a statement that workers showed "incredible patience" with Chevron and accused the company of attempting to violate the temporary agreement reached last month.
We hope to calm this matter now, but if Chevron tries to change the agreement again, our members clearly have no choice but to consider taking strike action, "Gandy said.
Chevron has previously stated that only a few issues have hindered the agreement, including reimbursement of meals and travel expenses.
LNG market breathes a sigh of relief
Traders expect that if the strike leads to a decrease in LNG supply, it will lead to Asian and European buyers competing for LNG spot prices, thereby stimulating spot price fluctuations in the European natural gas market.
Although the formal strike began early last month, the dispute has been ongoing for several months and has disrupted the global natural gas market, stimulating a 35% increase in liquefied natural gas prices in August.
Driven by the good natural gas supply situation in Norway and the easing of supply concerns surrounding geopolitical tensions, wholesale natural gas prices in the Netherlands and the UK fell for the second consecutive day on Tuesday.