Production at Shell’s (LON:SHEL) Prelude floating liquefied natural gas (LNG) facility offshore Western Australia may soon be affected by industrial strike action after the Offshore Alliance issued the supermajor with a notice of protected industrial action starting 10 June.
In response to the formal notice served by lawyers representing the Offshore Alliance, a labor union, as well as the Electrical Trades Union (ETU), issued on 30 May, Shell has “now resorted to industrial thuggery in a desperate effort to try and stop protected industrial action on Prelude,” the Offshore Alliance claimed in a post on Facebook today.
“One of the Shell leads, who has been parachuted onto Prelude, is throwing his weight around like he’s some sort of big king dick…this self-styled hero tough guy has been doing his best to intimidate some of the younger female tech’s by demanding they tell him whether they are in the Union and whether they intend to take Protected Industrial Action,” claimed the Offshore Alliance.
“Shell’s senior management need to pull this idiot into line as the Offshore Alliance will bang both him and Shell into the Federal Court for breach of Freedom of Association provisions if he doesn’t pull his head in. Pull off your management thugs, Shell,” added the union.
A Shell spokesperson told Energy Voice that “Shell recognises the entitlement of all workers to exercise their rights, including the right to participate in industrial action.”
The Offshore Alliance has listed 19 activities that will be banned at various times from June 10 to June 21, as part of their plan to implement “rolling stoppages of work and work bans.”
“Shell have had two years to sort out our key bargaining claims and nothing less than tier 1 rates and conditions and job security are going to cut it,” said the union, which combines the industrial and organisational resources of the Australian Workers Union (AWU) and the Maritime Union of Australia (MUA), to provide effective representation of offshore construction, maintenance, catering, and rig workers in Western Australia.
The Shell spokesperson said “we continue to engage with our people and their representatives and remain committed to acting fairly, respectfully and transparently at all times during the bargaining process.”
“As always, the health, safety and wellbeing of those who work on our sites is of the utmost priority” and “we work hard to provide a strong employee value proposition for our employees, which is competitive with industry peers,” added the spokesperson.
The Prelude FLNG unit has been mired with various problems since its inception. Production of LNG has been unreliable since the floater started up in 2019 due to numerous technical issues.
In January, Energy Voice reported that power problems on Shell’s FLNG vessel offshore Australia risked the “catastrophic failure” of parts of the ship’s structure, according to a report by the offshore regulator.
Indeed, offshore safety and environment regulator NOPSEMA has twice taken the rare move ordering Shell to stop production until safety issues were corrected. “A complete power failure in December 2021 left more than 200 crew without basic amenities and critical safety systems,” reported WA Today.
Shell evacuated non-essential staff from Prelude in December as the operator struggled to restore power that knocked out operations following a fire. The delay in bringing essential power generators back online at the Prelude LNG export plant had left workers without ventilation, potable water services and a sewage treatment system, reported Energy Voice at the time.
During the shutdowns, emissions from Prelude have been much higher than planned due to burning, or flaring, of excess gas, reported WA Today.
Meanwhile, Shell this week announced that it has taken a final investment decision (FID) to develop the Crux natural gas field offshore Western Australia. It will backfill the Prelude LNG export facility, as the supermajor eyes strengthening demand from Asian customers, seeking to transition from coal to gas.
However, Wood Mackenzie research analyst Michael Song cautioned that “with future supply secured, Prelude partners must ensure there are no further technical issues onboard the vessel and maintain stable production to take advantage of current LNG prices.”
First production from Crux is targeted in 2027.
The owners of the Crux field are Shell (82%), Australia’s Seven Group (15%) and Japan’s Osaka Gas (3%).
This story was updated with comment from Shell at 06.05 GMT on 2 June.