Japan’s JERA, one of the world’s biggest buyers of liquefied natural gas (LNG), expects a muted impact on the market from a potential strike in Australia thanks to high stocks and low seasonal demand, a top executive said on Thursday.
“I think the real impact is not much,” JERA’s Global CEO Yukio Kani told Reuters in an interview on the sidelines of the Gastech conference.
“I can understand the sentiment (which led to price volatility), because recent events in Ukraine makes the gas market more volatile. So, of course, we should be very careful,” he said.
“But… we have more than enough gas in Europe, inventories are building up. The weather is okay. It’s now shoulder season, the demand is coming down,” he added.
LNG facilities in Australia faced labour disputes last month, with about 700 workers at four facilities operated by Woodside Energy Group WDS.AX and U.S. major Chevron CVX.N threatening industrial action over pay and conditions.
Strike action at Chevron’s two major LNG projects in Australia was delayed for 24 hours because of progress made in mediation talks, a union alliance said on Thursday, raising prospects the parties may be nearing a deal.
Australia is the world’s biggest LNG exporter, and the ongoing dispute over wages and conditions had stoked volatility in gas prices amid fears the move would fuel competition between Asian and European buyers for cargoes.
China and Japan are the top lifters of Australian LNG, followed by South Korea and Taiwan.
Kani said people could have been more nervous if this had happened in the winter, if the winter had started with very cold weather and gas inventories were going down, but “now I think it is more stable”.
Woodside Energy managed to reach an in-principle agreement with unions at the offshore platforms of its North West Shelf facility.
(Reuters – Reporting by Emily Chow; Writing by Yuka Obayashi; Editing by Jan Harvey)