Shell Plc said on June 29 LNG shipments from its Prelude floating facility off northwest Australia would be disrupted for at least two weeks due to work bans by unions fighting for better pay.
Loading disruption at the 3.6-million-tonnes-per-year facility adds to tightness in a global LNG market just as Europe scrambles to secure cargoes to make up for lost Russian gas supply. One of the largest U.S. LNG plants, Freeport LNG is also undergoing an extended outage.
"We have issued a notice to customers that cargoes will be impacted until at least mid-July due to the industrial action," a Shell spokesperson said in an emailed comment.
The last cargo left Prelude on June 26 on the ship Oceanic Breeze, Refinitiv data shows.
When operating normally, the site typically loads a tanker every seven to 10 days, which suggests that loading of at least two cargoes will be prevented during the industrial action.
Prelude's loading delays come just three months after the facility resumed shipping LNG following a four-month shutdown due to a major power failure.
Workers on Prelude began 12 days of industrial action on June 10 over a pay dispute. The action has now been extended to July 14, Shell and the Australian Workers' Union said.
Shell has scheduled a vote on a new offer, including an increase of A$27,000 in the offshore allowance to A$117,000 ($80,900) a year, an increase of A$3,000 in the commuting allowance to A$10,000 annually, and other benefits.
The Australian Workers' Union says Shell has yet to meet some of its demands, including one that would stop Shell from hiring contract workers at lower pay than the company's employees doing the same job.
Prelude is co-owned by Shell, Inpex Corp., Korea Gas Corp. (KOGAS) and a subsidiary of Taiwan's state-run Chinese Petroleum Corp. Shell operates the facility.
Recommended Reading
Oceaneering Won $200MM in Manufactured Products Contracts in Q4 2023
2024-02-05 - The revenues from Oceaneering International’s manufactured products contracts range in value from less than $10 million to greater than $100 million.
E&P Highlights: Feb. 5, 2024
2024-02-05 - Here’s a roundup of the latest E&P headlines, including an update on Enauta’s Atlanta Phase 1 project.
CNOOC’s Suizhong 36-1/Luda 5-2 Starts Production Offshore China
2024-02-05 - CNOOC plans 118 development wells in the shallow water project in the Bohai Sea — the largest secondary development and adjustment project offshore China.
TotalEnergies Starts Production at Akpo West Offshore Nigeria
2024-02-07 - Subsea tieback expected to add 14,000 bbl/d of condensate by mid-year, and up to 4 MMcm/d of gas by 2028.
US Drillers Add Oil, Gas Rigs for Third Time in Four Weeks
2024-02-09 - Despite this week's rig increase, Baker Hughes said the total count was still down 138 rigs, or 18%, below this time last year.