A potential strike by workers at a liquified natural gas (LNG) plant in Western Australia has triggered a spike in European gas prices.
Benchmark wholesale gas prices for the European Union and UK rose about 10 per cent on Monday, Bloomberg reports.
The Offshore Alliance union, representing workers from the Australian Workers’ Union and the Maritime Union of Australia, at the North West Shelf operations in WA, could down tools by September 2 if no pay deal is achieved.
There are concerns that industrial action at Woodside Energy Group’s North West Shelf facility would disrupt LNG exports from Australia.
Workers at two other offshore LNG plants, Gorgon and Wheatstone, run by Chevron, are also voting on strikes, with results due on Thursday.
Collectively, the three facilities represent about 10 per cent of the global LNG supply.
Australia, Qatar and the US are the leading producers of LNG.
World gas prices jumped after Russia invaded Ukraine in February 2022 and the Kremlin cut supplies to Europe.
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It triggered a race by European nations to find new sources of the commodity, ramping up imports of pipeline gas from Norway and of LNG, mostly from the United States and Qatar.
Europe’s success in filling the gap left by Moscow has helped pull natural gas prices down from a record high of about $US331 ($515) per megawatt hour hit last August.
Some analysts believe strikes at the WA facilities would lead to a surge in global demand and higher prices.
Any reduction in Australian exports to Asia could force customers from that region to look for alternative supplies in Qatar, where they would compete with European buyers.
A Chevron spokesperson said earlier this month it was continuing to engage with employees.
Woodside told Reuters it had engaged constructively in the bargaining process with unions.
