Oil and gas giant Inpex has launched proceedings with the Fair Work Commission seeking urgent orders to stop strike action at its Ichthys LNG facility in Darwin, citing significant disruptions.
Earlier in the week, the Offshore Alliance — a union comprising the Australian Workers’ Union and the Maritime Union of Australia — flagged on social media that more than 400 workers would escalate protected industrial action and accused Inpex of “completely butchering” enterprise bargaining negotiations.
The Offshore Alliance is pushing for improved conditions and annual pay rises of three per cent, which an industry lobby group says would push the average salary of an Inpex worker to beyond $500,000 a year.
In a post to social media on Monday, the Offshore Alliance said members endorsed ramping up current four-hour work stoppages at the Darwin onshore and offshore facilities to eight hours from Thursday.
“We’re ready to step up and take Inpex,” the Offshore Alliance Union said in the post.
“Whilst the Inpex HR bosses have completely butchered these negotiations by failing to agree to a single bargaining claim in the first seven months of bargaining, the Inpex bosses in Tokyo have signed off on extensive Protected Industrial Action.”
The Fair Work Commission confirmed Inpex had filed an application under the Fair Work Act on Tuesday, and that a hearing had been scheduled before Deputy President Michael Easton for Friday.
“If the Ichthys production facilities are taken offline, there will be impacts to our LNG buyers and to the recipients of our domestic gas supply in the Northern Territory,” Inpex senior vice president Bill Townsend told the ABC.
“In the context of current fuel supply constraints, the disruption would be significant.”
Mr Townsend said Inpex remained engaged in “good-faith” enterprise agreement negotiations and was committed to reaching a fair and sustainable deal.
“While substantial progress has been achieved, several key items are yet to be resolved, including rates of pay, allowances, and career progression framework,” he said.
“Recently, Inpex shared a range of agreement options with bargaining representatives and employees prioritising different claims for their consideration.
“All agreement options result in improvements to overall terms and conditions and the opportunity for substantial pay increases.”
Inpex’s Ichthys facility produces about two per cent of the world’s LNG, and global supply is already under strain from conflict in the Middle East.
Independent analyst Peter Strachan says the impacts of strike action on the gas market could be significant.
“It comes at a very sensitive time for LNG because about 80 million tonnes of LNG, which is normally produced annually from the Persian Gulf area, is not flowing,”
he said.
“So that’s taken 80 million tonnes out of a sort of 350, 400 million tonne per annum market and pushed up the price … there’s a demand for liquefied natural gas to replace the gas lost out of the Gulf.”
He said that although the profession carries inherent risks, he did not believe the ongoing industrial action would be regarded favourably.
“I don’t think in the long term it’ll be looked at favourably by their employers to take this type of action at a time of war,” he said.
“They are paid quite well in comparison to other industries.”
Emergency gas contingencies in place
Since around 2022, the Northern Territory’s Power and Water Corporation has been forced to buy gas from LNG export facilities in Darwin Harbour, including Inpex, to ensure it can continue to run its power plants.
On Tuesday, David Hayes from the Electrical Trades Union said Inpex had supplied a substantial amount of gas to Darwin in the past year, but Power and Water Corporation has confirmed it has contingencies if there are continued disruptions.
“Power and Water sources gas from a diverse portfolio of onshore and offshore producers to meet the Territory’s electricity needs,” a spokesperson said.
“As standard business practice, Power and Water has contingency plans in place year-round to manage gas supply security for our community’s electricity generation.
“This includes maximising gas storage within the gas pipeline network, sourcing gas from the East Coast for delivery to the Northern Territory via the Northern Gas Pipeline, if required, and working with electricity generators who can use alternate fuel supplies.
“The percentage of gas sourced from any one provider changes daily in line with electricity demand.
“In cooler months (typically June to August), gas demand is less than in the wet season.”
“Join the companies that smart energy professionals follow – because when you’re featured on GEN, the industry pays attention.”
