The prospect of an impending strike at Australia’s prominent liquefied natural gas (LNG) facility, Woodside Energy’s North West Shelf plant, had triggered a surge in global gas prices. However, a potential disruption to global LNG supplies appears to have been averted, subsequently leading to a substantial decline in wholesale gas prices across Europe.
In a decisive turn of events on Thursday, Woodside Energy and unions associated with the North West Shelf plant reached an agreement in principle. This accord, if ratified through the forthcoming vote, is expected to prevent the looming strike that had the potential to disrupt global LNG distribution and consequently drive a sharp escalation in gas prices.
The repercussions of these developments are visible in the significant downturn of benchmark EU and UK gas prices, marking a nearly 33% decrease from their peak observed on Tuesday.
Representatives of the plant’s workforce conveyed their support for the in-principle agreement with Woodside Energy. The final decision on the deal’s approval is scheduled for 7:30 pm Perth time (11:30 GMT).
Brad Gandy, spokesperson for the union alliance, expressed contentment at Woodside’s substantial offer without necessitating industrial action. This turn of events brings relief amid concerns that the strike, initially set for September 2nd, could rekindle an upward trajectory in gas prices.
Against the backdrop of the conflict in Ukraine, Russia curtailed its natural gas supplies to Europe, prompting nations to explore alternative energy sources. With numerous countries relying on LNG to bridge the gap, Australia’s substantial LNG exports have contributed to a gradual decline in global gas prices and subsequently mitigated escalating energy bills that were witnessed in 2022.
