Published by The Maritime Executive

Published by The Maritime Executive

Published by The Maritime Executive

Published by The Maritime Executive

Published Jul 20, 2022 8:22 PM by The Maritime Executive

Shell's beleaguered, ultra-costly Prelude LNG project has been hit with another blow. Its workforce has gone on strike, forcing the floating LNG plant to suspend loadings at a time of record-high spot prices. 

The labor dispute has been running since June 10 with a combination of one-hour work stoppages and partial work bans. Last week, when the workers announced a "mooring ban" on LNG carrier arrivals, Shell was forced to shut down production.

Union coalition Offshore Alliance recently informed Shell that it plans to extend its strike through August 4, and Shell's management has responded with a lockout. Beginning July 25, Shell plans to cease pay for workers who have been taken off the facility. It is already removing nonessential staff and sending them back to shore. 

"Following the production shutdown caused by the protected industrial action, we cannot continue to operate in the same way,” a Shell spokesperson said in a statement. “As a consequence, we will be resorting to lock outs as the mechanism available under the Fair Work Act. Once the lockouts are in effect, people will no longer be paid if they are not mobilised to the facility.”

However, Offshore Alliance has warned that a lockout could have consequences beyond the negotiating table. “If Shell is actually serious about a lock-out it will significantly increase the chances of breakdown [on board],” Australian Workers Union leader Daniel Walton told Financial Review. “Shell will also encounter major issues with the regulator and struggle to maintain its licence to operate."

Shell says that it has offered its unionized workforce a pay raise of $20,000 on top of their average current salary of $140,000. However, the union says 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. 

The shutdown takes Prelude's output off the global market at a time of particularly tight supply. Prices in East Asia are at historic levels approaching $40 per MMBtu, up threefold year on year. 

Prelude's nameplate capacity is about 3.6 million tonnes per annum, but in reality, the troubled facility has rarely lived up to its expected potential. It has been plagued by breakdowns, including a fire and three-day power outage last December. That accident prompted Australia's National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) to shut Prelude down until Shell could prove that it had made safety improvements. 

Labor-management relations may have been colored by December's power outage. Crewmembers told WA Today that they had had to manage human waste manually because the sewage system was shut down, and without power for transfer pumps, they had to shuttle cans of diesel around by hand to keep a backup generator running. Offshore Alliance spokesman Brad Gandy called the accident "unforgivable" and said that "similar failures" had occured on board in the past. "Clearly Shell has not learned from its past mistakes," he said at the time. 

Published Jul 29, 2022 1:54 PM by The Maritime Executive

A week after the signing of the agreement with the United Nations to resume gain shipments from three Ukrainian Black Sea Ports, Ukraine’s president and other senior officials visited the ports to emphasize they are open and ready to start shipments. UN officials briefing the media said they were hopeful the first ships could depart before day’s end. "The first vessel, the first ship is being loaded since the beginning of the war,” President of Ukraine Volodymyr Zelenskyy highlighted during...

Published Jul 29, 2022 12:39 AM by The Maritime Executive

Nine Sri Lankan Navy sailors who traveled to the United States to join the Rim of the Pacific exercise have decided to jump ship and stay, according to Sri Lanka's Economy Next.  The sailors were part of a 50-person team that deployed from Sri Lanka in June in order to join RIMPAC 2022, the world's largest international naval exercise. After RIMPAC, they were scheduled to help crew a new Sri Lankan Navy ship: the former USCGC Douglas Munro, which was...

Published Jul 28, 2022 9:42 PM by The Maritime Executive

A U.S.-sanctioned Syrian vessel has arrived in Lebanon from the Black Sea carrying a cargo of wheat, and Ukrainian officials assert that it is the latest in a string of cargoes believed to be stolen from Russian-occupied territory.  The 13,000 dwt Syrian freighter Laodicea - a notorious U.S.-sanctioned vessel - called in Tripoli on Wednesday. She arrived on a voyage from the Black Sea, where she had been operating AIS-dark for two weeks. The Ukrainian Embassy in Lebanon asserts that...

Published Jul 28, 2022 9:13 PM by The Maritime Executive

Norwegian company Yara has partnered with Pilbara Ports Authority (PPA) to undertake a feasibility study for ammonia bunkering in the Pilbara region of Western Australia. Yara announced that it has signed an agreement with PPA to assess the potential for ammonia demand and the needed bunker infrastructure to meet it. The service would use the existing ammonia production facility of Yara Pilbara and draw on clean ammonia potential of the region. The feasibility study will also consider safety concerns for...

© Copyright 2022 The Maritime Executive, LLC. All rights reserved.