Shell Prelude LNG loading suspended for at least 2 weeks, worsening global supply

The logo of Royal Dutch Shell is pictured during a launch event for a hydrogen electrolysis plant at Shell’s Rheinland refinery in Wesseling near Cologne, Germany, July 2, 2021. REUTERS/Thilo Schmuelgen//

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  • Extensive industrial action delays LNG shipments
  • The last cargo left Prelude on June 26
  • Unions are urging Shell not to outsource lower-paying jobs

SYDNEY/MELBOURNE, June 29 (Reuters) – Shell Plc (SHEL.L) said on Wednesday deliveries of liquefied natural gas (LNG) from its Prelude floating facility off northwest Australia would be halted for at least two weeks due to work bans imposed by struggling unions better pay.

Load disruptions at the 3.6 million tonne annual facility are adding to tightness in a global LNG market as Europe scrambles to secure cargoes to make up for lost Russian gas supplies. Freeport LNG, one of the largest LNG plants in the US, will also be shut down for an extended period.

“We have informed customers that due to the industrial action, cargoes will be affected until at least mid-July,” a Shell spokesman said in an emailed comment.

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The final cargo left Prelude on June 26 on the ship Oceanic Breeze, data from Refinitiv shows.

During normal operations, the site typically loads a tanker every seven to 10 days, suggesting that the loading of at least two cargoes is prevented during the industrial dispute.

Prelude’s loading delays come just three months after the facility resumed shipping LNG after a four-month shutdown due to a major power outage.

Prelude workers began a 12-day industrial dispute on June 10 over a wage dispute. The action has now been extended to July 14, Shell and the Australian Labor Union said. Continue reading

Shell has scheduled a vote on a new offer including an A$27,000 increase in the offshore allowance to A$117,000 ($80,900) a year, an A$3,000 increase in the commuter allowance to A$10,000 a year and other benefits.

The Australian Labor Union says Shell has yet to meet some of its demands, including one that would stop Shell from hiring contract workers at lower wages than the company’s employees doing the same work.

Prelude is jointly owned by Shell, Inpex Corp (1605.T), Korea Gas Corp (KOGAS) (036460.KS) and a subsidiary of Taiwan’s state-owned Chinese Petroleum Corp. Shell operates the facility.

($1 = 1.4459 Australian Dollars)

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Reporting by Renju Jose in Sydney and Sonali Paul in Melbourne; Edited by Jacqueline Wong and Bradley Perrett

Our standards: The Thomson Reuters Trust Principles.

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