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    Prelude LNG strike extended to September


A further headache for Asian buyers just as spot prices for LNG soar to a five-month high. [Image: Shell]

by: Callum Cyrus

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Complimentary, NGW Interview, Natural Gas & LNG News, Europe, Liquefied Natural Gas (LNG), News By Country, Australia

Prelude LNG strike extended to September

Australian union members have voted to extend strike action at Shell's 3.6mn metric tons/year Prelude floating LNG facility off western Australia until September 1,  Offshore Alliance said on its Facebook account August 17, on behalf of its trade union affiliates Australian Workers Union and Maritime Union of Australia.

Trade unions are demanding that Shell cease the employment of temporary contractors at the facility, accusing it of hiring shift workers who undermine the remits of Prelude LNG's permanent staff. AWU and MUA are also seeking a better pay deal, based on a compromise at Inpex's Ichthys LNG facility that was struck in April.


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Shell told NGW: "Shell remains committed to reaching an agreement and working together to find a way forward with our workforce.”

Since July Prelude LNG's customers have been missing out on contracted cargoes. The union action actually began on June 10, but there was a brief respite weeks later.  Prelude LNG's suspension leaves Asian buyers without an important Asia-Pacific source of liquefied gas just as Freeport LNG's closure in the US has erased 20% of that country's export capacity. Bloomberg reported August 17 that Asian benchmark rates for spot LNG reached a five-month high of almost $60/mmBTU earlier this week.

Offshore Alliance insisted the Prelude LNG strike will continue until it secures its terms. It said: "Our Prelude members have drawn a line in the sand on job security and have this week supported the extension of Protected Industrial Action until our bargaining claims are resolved."

Prelude LNG typically produces 3.6mn mt/yr of LNG, 1.3mn mt/yr of condensate and 400,000 mt/yr of liquefied petroleum gas.  Billed as the world's largest floating LNG plant, the production vessel extracts feedstock from Shell gas fields in WA's Browse Basin, including the eponymous Prelude upstream project. Shell owns a 67.5% equity stake in Prelude LNG, followed by Inpex (17.5%), Kogas (10%) and CPC (5%).