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Chevron battles unions to prevent gas worker strike in Australia that could affect world supply

Chevron building in Australia

Chevron is in crucial talks with unions representing workers at two major liquefied natural gas (LNG) facilities in Australia to avert a planned strike.

Employees are about to launch a series of walkouts over pay and working conditions on Thursday, September 7. 

The potential strike has raised concerns about the impact on natural gas markets, increasing prices.

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The US energy giant Chevron owns the Gorgon and Wheatstone plants in Western Australia.

They collectively contribute over five percent of the world's LNG capacity. 

The Fair Work Commission, Australia's industrial arbitrator, has facilitated mediation talks between Chevron and the Offshore Alliance.

Offshore Alliance is a consortium representing two unions in the energy sector.

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Energy analyst Saul Kavonic said: "Lower level strikes looks set to start tomorrow, which will add inefficiencies but are unlikely to materially impact global supply.”

However, the looming threat of full stoppages from Thursday, September 14, could have a more major impact on global energy markets. 

Six percent of global supply could be hit

Should these strikes escalate to full stoppages, approximately six percent of global supply could be affected.

It could cause price spikes if the strikes persist into the northern hemisphere winter.

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This labor dispute occurs amid fluctuating energy prices, partly driven by Russia's invasion of Ukraine.

It led to heightened oil and gas prices and increased consumer energy costs. 

Wholesale energy prices have moderated since the peak.

But recent extensions to supply cuts by Saudi Arabia and Russia have pushed oil prices above $90 a barrel, marking the first time since November.

Russia's reduction of natural gas supplies to Europe has prompted nations to seek alternative energy sources, with many turning to LNG to fill the gap. 

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