Shell (LON:SHEL) said it will lock out workers at its troubled Prelude floating liquefied natural gas (LNG) export project from Monday unless they stop their strike action as the industrial dispute that has disrupted production at the vessel intensifies.
Last week Shell said that it had started shutting down the 3.6 million tonne per year FLNG unit offshore Australia and that it would not be able to supply customers with LNG if the strike action, which started 10 June, continued.
Workers taking industrial action will be locked out from Prelude starting 25 July and they will not be paid at all under the lockout. The decision was taken after unions informed Shell that they were extending protected industrial action as they seek higher pay and restrictions on the use of contractors at Prelude.
The Offshore Alliance, which combines the Australian Workers’ Union and the Maritime Union of Australia, said Shell had refused to bargain since workers rejected the energy major’s latest offer 11 days ago.
The Australian Financial Review reported that LNG production at Prelude will remain shut down until at least August 4.
The Offshore Alliance is using a pay deal agreed with Japan’s Inpex in April as the benchmark for talks with other oil and gas majors, including Chevron at its Wheatstone platform, reported Reuters.
Inpex agreed to base rates of pay between A$125,000 and A$258,000 (US$86,000 and US$178,000) plus allowances, up from between A$92,000 and A$102,000.
Local media reported that Shell said it had offered its unionised workforce a pay raise of A$20,000 on top of their average current salary of A$140,000. However, the union said that it also wants job security guarantees in order to prevent Shell from outsourcing work to contractors. Its 150 members have turned down the pay offer by a wide margin.
Prelude is co-owned by Shell, Inpex, Korea Gas Corp (KOGAS) and a subsidiary of Taiwan’s state-run Chinese Petroleum Corp (CPC).