Gas prices dropped across Europe’s major benchmarks today as the prospect of disruption at Australia’s largest liquefied natural gas (LNG) plants eased after positive talks between unions and the site’s operator.
The UK’s natural gas benchmark has dropped 9.97 per cent in this morning’s trading, while the Dutch benchmark had also fallen 10.14 per cent over the same time period.
Spot prices have slumped to 83.1p therm in UK markets, and to €36.79 per megawatt hour in the Netherlands.
Woodside Energy has reached a deal in principle with gas workers on its offshore platforms on the North West Shelf, off the coast of Australia following a protracted dispute over conditions and pay.
The unions have now committed to not filing a notice of protected industrial action.
Woodside chief executive Meg O’Neill acknowledged the effort from all sides through the bargaining process and was pleased to be closing in on a deal.
“We will continue to engage in respectful and constructive dialogue with all of our people as we work together to finalise the agreement and maintain safe and reliable supply of energy to our customers,” she said.
Employee representatives told news agency Reuters they were “supportive of the in-principle agreement” and all members will now vote to ratify the deal later today.
The Woodside workers’ unions had threatened to strike as early as 2 September, unless their conditions were met, causing prices to spike this month over concerns strikes would halt the flow of LNG to Europe.
However, there is still the prospect of industrial action at the Gorgon and Wheatstone LNG facilities overseen by Chevron, which account for about one-tenth of global supplies.
Workers there have voted to allow unions to call for a strike if necessary, meaning there is still a possibility of supply disruption in future.
LNG has been an essential supply source for Europe as it has scrambled to avoid a supply crunch following a Russian gas squeeze, which the Kremlin has overseen since it was hit with sanctions after the country’s invasion of Ukraine.
But EU gas storage levels are 91.6 per cent full heading into winter, according ASGI data, lowering the prospect of a battle over global supplies from competing European and Asian markets.