Workers to launch industrial action at Woodside LNG facilities in Australia

Some workers at Woodside Energy’s Karratha gas plant and Pluto liquefied natural gas facilities in Western Australia will begin industrial action from Wednesday, according to the Offshore Alliance workers union, as reported by Reuters.

The Offshore Alliance, a grouping of the Australian Workers' Union and the Maritime Union of Australia, said in a Facebook post on Friday that it had informed contractor UGL earlier this week of its intention to begin Protected Industrial Action (PIA) amid an ongoing dispute over wages and working conditions.

The union alleged that the contractor was relying on third-party workers in an effort to suppress wages.

The latest escalation follows earlier strike votes organised by Offshore Alliance workers at Woodside’s Pluto 2 project involving contractor Bechtel.

Supply concerns

The dispute is unfolding against a fragile backdrop for global LNG markets. Supply chains are already under strain as disruptions in the Middle East continue to curb LNG flows through the Strait of Hormuz, forcing Asian importers to compete aggressively for alternative cargoes.

Industry observers say any prolonged disruption in Australia, one of the world’s largest LNG exporters, could intensify pressure on already volatile gas markets.

The developments have revived memories of the strikes at Chevron’s Australian LNG facilities in 2023, which triggered sharp spikes in global natural gas prices and rattled energy markets worldwide.

Woodside’s Karratha Gas Plant has export capacity of around 14 million tonnes per year, while Pluto LNG can produce approximately 5 million tonnes annually and is currently undergoing expansion through a second train expected to add similar capacity.

Further escalation

Meanwhile, industrial tensions are also building at Inpex’s Ichthys LNG project in Darwin.

The Offshore Alliance said on Wednesday that talks with Inpex, moderated by Australia’s Fair Work Commission, had failed to resolve key issues. Union members have now voted to issue a strike notice at the 8.9-million-tonnes-per-year Ichthys LNG facility if a final round of negotiations on Friday does not deliver an agreement.

Ichthys accounts for roughly 2% of global LNG supply and ships around 9.3 million tonnes annually, with much of its output destined for Japan.

UGL declined to comment on the dispute. Woodside said it respects contractors’ rights to strike and that “any potential protected industrial action involving UGL employees will be managed by UGL.”