Published on 15 Sep 2023 on Zacks via Yahoo Finance

Chevron's (CVX) Wheatstone LNG Plant Outage Shuts 25% Output

Chevron Corporation’s (CVX) Wheatstone liquefied natural gas (LNG) plant in Australia, responsible for approximately 5% of the global LNG supplies, recently reported a production outage due to an ongoing labor dispute, per media reports.

According to CVX, it is attempting to restart full production at Wheatstone LNG, following a fault that has impacted about 25% of LNG production. Approximately 500 workers at the Wheatstone and Gorgon LNG plants have been participating in limited strikes of up to 11 hours since last week due to a labor dispute, although it is unclear if this is the reason behind the fault. The workers union stated that it intends to escalate industrial action beginning Thursday and could stop working entirely while refusing to do crucial tasks, such as loading LNG tankers.

While faults and outages are not uncommon in LNG plants, energy analysts warn that strike actions could prolong the time required for repairs, potentially leading to supply disruptions. However, Goldman Sachs believes that there is a low probability of a prolonged outage leading to a substantial spike in natural gas prices.