Australian Unions Extend Strike at Shell's LNG Facility

(Reuters) — Unions extended industrial action on Tuesday until Aug. 11 over a long-running wage dispute at Shell Plc's Prelude floating liquefied natural gas (FLNG) facility.

The Offshore Alliance and the Electrical Trades Union said they extended bans on tasks such as transfer and supply of hydrocarbons or any other products from the facility off northwestern Australia.

Shell began shutting down the 3.6-million-tonne-a-year site this month and told customers it would be unable to supply cargoes for the duration of work stoppages approved by Australia's Fair Work Commission or protected industrial action (PIA). 

Shell has told workers it would not resume talks on a new wage agreement until they called off the stoppages, begun on June 10.

"We need your help to lift the PIA so we can get back to the bargaining table and normal operations," Shell's Prelude asset manager Peter Norman told workers in a letter on Monday, seen by Reuters.

In the letter, Shell said it was calling off a planned lock-out of workers to enable safety-critical work, and would pro-rate pay for those doing partial work because of the work stoppages.

On Tuesday, the Offshore Alliance's spokesperson Daniel Walton said that while Shell rejected the union's offer last week for mediation through the Fair Work Commission, it still stood.

"Negotiations should always be a dialogue, not a game of chicken," Walton said.

The Offshore Alliance is using an April pay deal with Japan's Inpex Corp. at its Ichthys LNG operation as a benchmark for talks with other oil and gas majors.

Inpex agreed to base rates of pay between A$125,000 and A$258,000 ($86,000 and $178,000) plus allowances, up from between A$92,000 and A$102,000.

Prelude is co-owned by Shell, Inpex, Korea Gas Corp. (KOGAS), and Taiwan's state-run Chinese Petroleum Corp.


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