The Australian Fair Work Commission has given the go-ahead to industrial action at Woodside Energy’s Pluto LNG 2 project after trade unions failed to agree on higher wages with the company.

Per the regulator’s decision, as cited by Reuters, the Offshore Alliance, which groups two industry trade unions, must hold a vote no later than December 4 to decide whether to start a strike. If the strike is approved, it would delay the start of production at Pluto LNG 2, which was scheduled for the second half of 2026.

The dispute arose from findings made by the Offshore Alliance that workers at Pluto LNG 2 get paid 30% less per hour than workers at Chevron’s Wheatstone LNG project. The unions then asked Bechtel, the contractor working on Pluto LNG 2, to raise wages, but Bechtel refused, prompting the threat of industrial action.

Pluto 2, which is 91% completed, is an expansion on the Pluto LNG project, which sources natural gas from the Scarborough gas project, operated by Woodside. The expansion has a capacity of 5 million tons of LNG annually, and construction began back in 2022. The original Pluto facility has so far delivered more than 500 LNG cargos, Woodside said earlier.

Woodside Energy said earlier this year it expected significant growth in its oil and gas sales in the next seven years, driven primarily by liquefied natural gas. By 2032, the company should have an annual capacity of 40 million tons from 19 million tons as of this year. Pluto LNG 2 would add 5 million tons to the company’s annual total capacity.

“With global LNG demand forecast to grow 60% by 2035, Woodside’s increasing scale across the Atlantic and Pacific basins, combined with our marketing and trading business, optimises our capability to meet customer needs,” chief executive Meg O’Neill said at Woodside’s Capital Markets Day earlier this month.

By Irina Slav for Oilprice.com

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