Woodside and Chevron Australian LNG Strikes Put 10% of World LNG Exports at Risk

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    Andrew Koval

    The Rebound in European and British natural gas prices continued this week with their biggest weekly gain since June. We saw surging UK and European p
    [See the full post at: Woodside and Chevron Australian LNG Strikes Put 10% of World LNG Exports at Risk]


    Thermal-coal prices would likely move sharply higher if a labor dispute disrupts Australia’s LNG exports and causes gas prices to spike, Citi analyst Paul McTaggart says in a note. “If Asian/European gas prices do spike to $20/mmbtu [million British thermal units]” on any lengthy supply disruption, “we’d expect NEWC6000 thermal coal to be in a range of $220-$260/ton given equivalent energy pricing and price regression,” says McTaggart. Newcastle coal, an industry benchmark, currently trades at around $140/metric ton. European gas is roughly $12/mmbtu.(; @RhiannonHoyle)


    Chevron LNG talks drag into Friday while unions say deal unlikely

    Talks between Chevron and labour unions in Australia are set to drag into Friday — keeping natural gas markets on edge — as unions said a deal to avert strikes is unlikely.

    Offshore Alliance, representing the workers, considers the package provided by Chevron underwhelming, and it’s very unlikely they will reach an agreement, according to a union representative who asked not to be identified in line with policy.

    Chevron said it will “continue to work through the bargaining process,” adding that strikes, initially expected earlier this week, were delayed until 1pm Perth time on Friday.

    Gas prices in Europe — which are still volatile after last year’s historic energy crisis — jumped as much as 6.4 per cent on the news. The continent’s benchmark contract surged 40 per cent at one point on fears of supply disruptions from Australia, highlighting Europe’s heavy dependence on LNG after the curtailment of Russian pipeline gas flows.

    Full 24-hour strikes at Chevron’s Gorgon and Wheatstone plants, which together supplied about 7 per cent of the world’s liquefied natural gas last year, are still scheduled to run for two weeks from September 14 if no resolution is reached.

    Another exporter, Woodside Energy Group, reached a breakthrough with unions last month at its nearby North West Shelf LNG plant.

    Muted demand in Europe and Asia means the impact of walkouts could be limited initially, though any prolonged disruptions threaten to spark a bidding war between the two regions for cargoes in the peak winter season.

    Europe’s supply is already impacted by the extension of maintenance at major gas fields in top exporter Norway. Flows from the country, already at multi-year lows, dropped further on Thursday, also pushing prices higher earlier in the day.

    Dutch front-month futures, Europe’s gas benchmark, traded 4.7 per cent higher at €32.55 a megawatt-hour at 4.44pm in Amsterdam.

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