Talks Start to Avert Strike at Australia's Biggest LNG Terminal

Talks to avoid strikes at Australia’s biggest liquefied natural gas export terminal began Wednesday morning, with the threat to supply set to continue rocking global markets for the fuel.

Woodside Energy Group Ltd. and officials representing workers at its North West Shelf LNG facility have started discussions in Perth to negotiate pay and conditions, according to people with knowledge of the matter. Talks are expected to continue until the evening.

The Offshore Alliance, a group representing two major labor unions, previously said that it will move forward with strikes as early as Sept. 2 if a deal isn’t reached on Wednesday.

The risk of disruptions to LNG exports from Australia, one of the world’s biggest suppliers, has sent Asian and European prices surging this month. Strikes at Woodside and Chevron Corp. facilities, which is facing similar labor action, may put as much as 10 percent of global LNG supply at risk just as the Northern Hemisphere prepares for winter.

Ballots opened over the last week on potential walkouts by workers at some of Chevron’s LNG facilities and will likely be finished by early next week.

Asian LNG buyers are holding back purchases and requesting looser delivery terms to avoid any potential impact. It’s unclear how long it will take for any strike action to materially affect exports.

“We are making good progress” in discussions, Woodside Chief Executive Officer Meg O’Neill said on Tuesday, noting that an agreement would have to cover the totality of the employment arrangement, and it isn’t as simple as just negotiating pay.

The pay disputes come as Woodside, Australia’s biggest oil and gas producer, said on Tuesday that first-half profits rose as record output from an expanded portfolio offset a downturn in prices.