MELBOURNE — Shell and unions representing workers at its Prelude floating liquefied natural gas (FLNG) facility have reached a wage deal to end a long-running strike and restart production at the site off northwest Australia, they said on Wednesday, according to a Reuters report.
Shell shut the 3.6 million-tonnes-per-year Prelude facility in July and told customers it would be unable to supply LNG for the duration of the protected industrial action, or strikes approved by Australia's Fair Work Commission, over a wage dispute.
"Shell is pleased to confirm an in-principle enterprise agreement has been reached with the Australian Workers’ Union and Electrical Trades Union in relation to the Prelude FLNG facility," the company said in an emailed statement. "The process to formally lift the work bans in place under the Protected Industrial Actions is expected to be completed shortly, which will enable the facility to commence the process to prepare for a hydrocarbon restart."
Shell did not give a timeframe for restarting production or resuming LNG shipments at Prelude. The company would need to work through a staged startup process, a spokeswoman said, according to the Reuters report.
The Offshore Alliance, which combines the Australian Workers' Union and Maritime Union of Australia, said workers would vote on the enterprise bargaining agreement (EBA) later this week.
"76 days of lawful Protected Industrial Action to secure an EBA which prevents jobs being outsourced to low-wage labor hire contracts is a fight worth having," the Offshore Alliance said on its Facebook site.
The unions said they would disclose details about pay and rostering improvements secured in the agreement later this week.
However, on their key demand for job security, the Offshore Alliance said Shell had agreed that if it increases the use of contract labor, it will not cut the number of employees covered by the new agreement as a consequence.
"I know our members are keen to get back to work as usual—more secure in their jobs—and able to help Shell Prelude be as successful as it can be," Offshore Alliance spokesperson Daniel Walton said in a statement.
In late May of this year, Shell sanctioned development of the Crux gas field in the Bonaparte Basin offshore northwest Australia, according to Wood Mackenzie. The $2.5 billion development will produce 1.6 Tcf of gas, 60 MMbbl of condensate and 40 MMbbl of LPG via an unmanned platform tied back to the 3.6-MMt/year Prelude FLNG vessel. At the time, WoodMac research analyst Michael Song said Shell needs these supplies to ensure the FLNG facility produces at its nameplate capacity into the 2030s.