Strike Threat Looms Over Inpex’s Ichthys LNG Plant

Union talks at Inpex’s Ichthys LNG facility in Australia entered a critical final stage as workers warned strike action could disrupt LNG supplies to Asian markets.

(Reuters) — Talks to avert industrial action at Inpex's Ichthys liquefied natural gas facility in Australia enter their final day on May 15, with unions warning they will issue a strike notice unless a deal is reached.

Workers at the 9.3 million metric-ton-a-year facility near Darwin last month endorsed strike action over pay and conditions, pending six days of negotiations in May.

Unions said on May 13 that the talks, moderated by the Fair Work Commission, had failed to resolve all the issues and members had voted to serve a strike notice at the end of negotiations on Friday.

If notice is served on May 15, a strike at the plant could happen as soon as next May 13, according to labor laws.

Any disruption at Ichthys LNG could exacerbate already tight energy supplies globally and is being closely watched by Japanese power and gas utilities that buy from it.

Australia is Japan's largest LNG supplier, and the country is already facing a possible supply crunch due to the Iran war and rising air-conditioning demand as Japan heads into summer.

Inpex said on May 13 it would "engage in sincere discussions with the Ichthys labor union ​to prevent a major strike."

Last month, a majority of eligible employees at the plant had rejected a pay deal the Japanese company tabled.

Members of the Offshore Alliance, a grouping of the Maritime Union of Australia and the Australian Workers Union, said the new contract did not meet benchmark industry standards for wages and conditions.

They voted overwhelmingly in favor of strikes, endorsing various forms of potential industrial action including work stoppages ranging from 30 minutes to 24 hours.