Strike vote at major Australian LNG plant set to close

• A strike would impact Japan's LNG supply during increased summer air-conditioning demand and amid existing shortages from the Iran war, which has constrained over 20% of global LNG supply through Strait of Hormuz closures
• The Offshore Alliance rejected Inpex's pay deal, saying it fails to meet benchmark industry standards for wages and conditions at the Darwin facility
• A similar 2023 strike by the same union at Chevron's Wheatstone facility previously tightened global LNG markets, demonstrating potential supply impact

Summary: Strike Vote at Inpex's Ichthys LNG Facility

Key Development:

A strike vote at Inpex's Ichthys liquefied natural gas facility in Darwin, Australia, closed Friday, April 24, after workers rejected the Japanese company's proposed employment agreement on pay and conditions.

Critical Facts:

• The Ichthys facility has a capacity of 9.3 million metric tons per year
• The Offshore Alliance, representing 430 unionized workers from the Maritime Union of Australia and Australian Workers Union, is leading the action
• Approximately 95% of the Ichthys workforce is unionized
• Workers claim the proposed deal fails to meet benchmark industry standards for wages and conditions

Market Implications:

A strike could significantly worsen already tight global energy supplies. Japan, which relies on Australia as its largest LNG supplier, is particularly vulnerable as it faces energy shortages due to the Iran war and rising summer air-conditioning demand.

The situation mirrors 2023 when a similar strike at Chevron's Wheatstone facility tightened global LNG markets. Currently, over 20% of global LNG supply is already constrained by the Strait of Hormuz closure since the Iran war began February 28.

Companies Affected:

• Inpex (Primary): Japanese gas giant operating the facility
• Japanese power and gas utilities closely monitoring the situation
• Previous precedent: Chevron's 2023 Wheatstone strike

Regulatory Context:

The protected action ballot received approval from Australia's Fair Work Commission earlier in April, legitimizing potential industrial action.

The outcome carries significant implications for global energy markets already strained by geopolitical tensions and supply constraints.