Shell’s Prelude LNG facility to be hit with industrial action from Friday

By Sonali Paul

MELBOURNE (Reuters) – Workers on Shell Plc’s Prelude floating liquefied natural gas (FLNG) facility off Western Australia are set to begin 12 days of industrial action on Friday over a pay fight, a union alliance said on Thursday.

Shell did not comment on what impact the mix of short work stoppages and bans on certain tasks, to run through June 21 might have on output at the 3.6 million-tonnes-a-year LNG facility.

“Shell recognises the entitlement of all workers to exercise their rights, including the right to participate in industrial action,” a Shell spokeswoman said in emailed comments.

The action comes two months after Prelude resumed shipping LNG after a four-month shutdown due to a major power failure.

The Offshore Alliance, which combines the Australian Workers Union (AWU) and the Maritime Union of Australia, is pressing to stop Shell from hiring contract workers at lower pay than the company’s own employees doing the same job.

“We will not budge from that basic starting point,” AWU national secretary Daniel Walton said in emailed comments.

The wage battle follows more than two years of bargaining and comes as resource projects face a tight labour market.

Japan’s Inpex Corp in April sealed a five-year pay deal for its Ichthys LNG project, which the AWU hailed as “outstanding” and said would serve as a benchmark for deals with other oil and gas majors.That agreement has base rates of pay between A$125,000 and A$258,000 ($90,000-$185,000) plus allowances, up from between A$92,000-A$102,000.

Separately, the National Offshore Petroleum Safety and Environmental Management Authority said on Thursday it has launched an investigation after receiving a complaint from the Offshore Alliance about problems with smoke detectors on Prelude and being notified by Shell about an issue with fire suppression equipment at the facility.

“The issue does not impact the ability to safely operate the Prelude FLNG facility, and there are no impacts to people or production as a result of the issue,” Shell’s spokeswoman said.

($1 = 1.3943 Australian dollars)

(Reporting by Sonali Paul; Editing by William Mallard)