Shell: LNG shipments from Prelude FLNG to be impacted due to industrial action

Shell’s Prelude FLNG facility offshore Western Australia will have its operations disrupted until at least mid-July due to industrial action.

On 29 June, Shell informed Reuters that LNG shipments from the Prelude FLNG would be disrupted for at least two weeks due to work bans by unions fighting for better pay.

In an e-mail correspondence with Offshore Energy, Shell said that, for now, it has no official statement on the topic. However, the company shared background information on the issue and declared it “recognises the entitlement of all workers to exercise their rights, including the right to participate in industrial action.”

“The safety and welcome of people on our sites remain our highest priority,” the statement said.

In November 2020, Prelude FLNG employees voted in support of Enterprise Agreement (EA) negotiations. Negotiations towards an enterprise agreement have been ongoing ever since. In May 2022, union members on Prelude voted to take Protected Industrial Action (PIA) on the Prelude FLNG facility.

Currently, the PIA runs from 10 June to 14 July and includes 29 specific work bans.

From 1 July, there are a number of additional work bans that will come into effect, including activities relating to facilitating the side-by-side mooring of tankers or vessels.

Approximately 200 offshore Prelude employees are impacted by the enterprise bargaining process. This also represents the first collective agreement for Prelude as these employees up to now have been on individual agreements.

The Prelude FLNG facility has the capacity to produce 3.6 million tonnes per annum of LNG. It is located at Browse Basin, 475 kilometres from Broome in Western Australia.

Shell holds a 67.5 per cent stake in the FLNG. Additionally, Japan’s Inpex holds a 17.5 per cent stake, Korea’s Kogas 10 per cent, and Taiwan’s CPC holds 5 per cent.

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