Rising Gas Prices: Strike Begins In Australia

In Australia, a much-feared strike has begun in the gas industry, causing immediate rise in prices.

Today, on Friday, September 8, 2023, workers at Gorgon and Wheatstone, two Chevron’s liquefied natural gas (LNG) plants, stopped operating after all negotiations with their union broke down. Australia is the world’s largest exporter of liquefied gas, which, following cuts in Russian pipeline supplies, is increasingly being used to transport natural gas, especially in Europe (although most of Australia’s LNG is headed to Asia). Liquefied gas is ideal for supplying this valuable fuel without requiring special infrastructure: it is transported on ships, then regasified and supplied to the network.

Factories affected by the strike account for 5% to 7% of global supplies. The market reacted to the news immediately: gas prices in Europe went up. Futures at the TTF hub (Holland) rose in price by 8%, to 35.25 euros per megawatt-hour, after which the increase in the previous closing trading sessions was already 11%.
Prior to this, in August, gas prices rose sharply (at the TTF hub by 40%), which was again associated with labor conflicts in Australia. In this case, the Australian manufacturer Woodside Energy was to blame, but then, after negotiations, a strike at the North West Shelf plant was still avoided. However, now, according to Reuters, after five days of negotiations, Chevron executives have not significantly budged from their positions, which gave the start to the protest.