Update: Australian unions end strike at Inpex Ichthys LNG as pay deal reached
- Unions say strike action to end Wednesday evening
- Strike disrupted LNG production, shipments
- Over 400 union members endorse 3% annual pay raise
Australian unions said on Wednesday that they have reached a deal with Japan's Inpex to end strikes at the Ichthys liquefied natural gas (LNG) onshore and offshore facilities.
Australia's Offshore Alliance began strike action on June 2, which has disrupted LNG shipments and forced Inpex to shut one of two LNG production trains at the plant in Darwin this week.
"Unions have notified Inpex there will be a cessation of all strike action by 6 p.m. tonight," the Offshore Alliance, which includes the Australian Workers Union and the Maritime Union of Australia, said in a statement.
Over 400 union members have endorsed the settlement. The Electrical Trades Union is also part of the strike, which could have hit exports amid a tightening in global LNG supplies after the Iran war hit production and exports from the Middle East.
Unions said two condensate cargoes and one LNG cargo from the Ichthys plant have missed their loadings and estimated the strike cost the company $200 million in lost earnings.
Inpex confirmed an "in-principle" agreement had been reached.
"Protected industrial action has ceased at the Ichthys LNG facilities and we are pleased to confirm cargo loading has recommenced," said Inpex corporate senior vice president Bill Townsend.
Ichthys, which can produce 9.3 metric MMtpy of LNG, accounts for about 10% of LNG supply from Australia, which is the largest LNG exporter after the United States.
Electrical Trades Union Northern Territory organizer Dave Hayes said the agreement came through Tuesday night and work had already restarted.
"Train 1 remains online and only a couple of days to get Train 2 back up," he said. "I would expect they are loading the LNG tanker today."
The alliance had planned to extend the strike until July 6, after Australia's labor tribunal rejected Inpex's bid to halt the strikes and ordered the parties to return to bargaining.
Unions alleged on Monday Inpex did not return with an updated employment agreement and then extended their strike, doubling the hours workers would take off.
The Offshore Alliance said on Wednesday the new agreement will "deliver significant gains in job security, pay, career progression, workplace rights and working arrangements".
The deal also mandates a 3% annual raise on top of the consumer price index, according to local media.
It said the agreement ensures permanent jobs will not be outsourced to low-wage hire contractors and an improved roster flexibility has been offered to offshore workers.
Offshore Alliance Coordinator Zach Duncalfe said the deal "sends two clear messages to the industry: one, that workers expect to share fairly in the success of the projects they operate every day, and two, the Offshore Alliance will always fight tooth and nail to secure outcomes for our members".
Several other employment agreements with oil and gas companies are up for renegotiation this year.
The Offshore Alliance had led bargaining with Inpex since last year and first threatened strike action in April.
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