Shell to restart production on Prelude LNG vessel after union deal
Shell plans to restart production from its Prelude LNG vessel after concluding a long standoff with unions over employment conditions.
A 76-day standoff at the Prelude LNG plant has ended between energy giant Shell and unions after a new employment deal was sealed, paving the way for LNG exports to resume from the offshore facility following a month-long shutdown.
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, while a shutdown of the plant took place in July amid the industrial dispute.
The UK oil major said an enterprise agreement for Prelude has been reached with the Australian Workers’ Union and Electrical Trades Union, while declining to disclose details of the truce.
The Offshore Alliance – representing the Australian Workers’ Union and Maritime Union of Australia – said members secured better pay and rostering arrangements along with new job security and career progression opportunities.
“Our members have not taken a backward step in fighting for job security, significant uplifts in salaries and union negotiated employment conditions,” the Offshore Alliance said. “There has never been an industrial battle in this country where an employer has lost $1.5bn in production during an industrial dispute.”
Shell has agreed that if it increases the use of contractor or labour hire workers it will not reduce the number of employees covered by the agreement, the unions said, while noting it was now focused on negotiations with Santos, Chevron, and Woodside.
Shell said a process to formally lift the work bans in place should be completed shortly, allowing a restart of production from the export facility located 200km off Australia’s northwest coast.
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 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.
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