Prelude LNG workers face lock out

Workers at the giant Prelude LNG floating vessel face a lock out as an industrial dispute deteriorates.

An industrial dispute has escalated at the giant Prelude floating liquefied natural gas vessel.

An industrial dispute has escalated at the giant Prelude floating liquefied natural gas vessel with Shell to lock out workers from Monday until ongoing strike action is withdrawn.

Prelude workers were informed by Shell late on Wednesday that those taking industrial action would be subject to a lock out with no pay from July 25.

Unions earlier on Wednesday had extended protected action until August 4, which had caused the shutdown of the plant and a halt to lucrative LNG exports.

“Following the production shutdown caused by the protected industrial action, we cannot continue to operate in the same way,” a Shell spokeswoman said.

“As a consequence, we will be resorting to lock outs as the mechanism available under the Fair Work Act. Once the lock outs are in effect, people will no longer be paid if they are not mobilised to the facility.”

The Prelude Floating LNG Project is located in the Browse Basin, about 475 kilometres north-east of Broome, Western Australia. Picutre: Supplied

The Offshore Alliance – representing the Australian Workers’ Union and Maritime Union of Australia – first won permission to take protected industrial action – including a ban on “any work to facilitate the side-by-side mooring of tankers or vessels” – from June 22.

AWU national secretary Daniel Walton said he was concerned by Shell’s action.

“If Shell is actually serious about a lockout it will significantly increase the chances of breakdown and endanger the safety of workers on site,” Mr Walton said. “It will also lock in a loss of production into the future and cement the Prelude's status as a white elephant. Shell will also encounter major issues with the regulator and struggle to maintain its license to operate.”

Unions and Shell have been at loggerheads over a new enterprise agreement for months, with unions pushing for a 30 per cent increase to the allowance given to workers working offshore, to $117,000 a year, and a range of improvements to conditions – and for bans on the introduction of contract workers.

Shell has taken its own pay offer directly to its workers, but 95 per cent of voting employees rejected the deal.

Spot LNG prices are trading at seasonal records and several major Asian nations including Japan and Pakistan are grappling with the threat of blackouts amid shortages of the fossil fuel.

Shell owns 67.5 per cent of Prelude – located northeast of Broome – alongside Japan’s Inpex with 17.5 per cent, South Korea’s Kogas at 10 per cent and Taiwan’s CPC with 5 per cent.

Originally published as Prelude LNG workers face lock out