Wholesale gas prices in Europe have dropped after a planned strike at Australia’s largest liquefied natural gas plant looked to have been averted.

The walkout at Woodside Energy’s North West Shelf plant had become a very potent threat for undisrupted global LNG supplies, driving up gas prices sharply. But on Thursday the firm reached an agreement with the unions. This development will hopefully halt the strike. Benchmark EU and UK gas prices have nosedived almost 33% since their peak on Tuesday. Employee representatives at the plant said they were “supportive of the in-principle agreement” with Woodside Energy and would vote to ratify the agreement on Thursday. “It’s pleasing that Woodside has made our members a strong offer without industrial action being taken,” union alliance spokesman Brad Gandy said.

Following its invasion of Ukraine, Russia reduced supplies of natural gas to Europe, which led countries to look for alternative sources of energy. Many nations are relying on LNG to fill the gap, with Australia being one of world’s largest exporters. It has led to a steady fall in global gas prices and energy bills, which climbed in 2022. However, the news that workers at the North West Shelf plant might walk out on 2 September sparked fears that prices would start to go up again.

Woodside said it would continue to work with the unions to finalise the deal. “Substantial progress was made at talks held on Wednesday and the parties have reached in-principle agreement on a number of issues that are key to the workforce,” it added.

Strike Risk Remains For Chevron LNG Projects in Australia

Woodside Energy may have sealed an agreement with trade unions to avert a strike of gas platform workers but Chevron has yet to get so lucky. The supermajor in fact angered the alliance of unions it is negotiating with, after it put a proposal directly to the worker vote bypassing the bargaining stage, Reuters reports. “Their stupidity is about to cost them $billions in lost production and profit,” the Offshore Alliance said in a Facebook post that was quoted by Reuters. Yesterday, overwhelming 99% of the workers in the unions working at Chevron’s two LNG projects offshore Australia voted in favor of authorizing industrial action. That could turn into a partial strike, with workers refusing to carry out certain tasks, such as loading tankers, or an all-out strike. Chevron’s failure to strike a deal with workers can once again jack up prices.

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