MOSCOW, Aug 12 Exchange gas prices in Europe, due to strikes by workers at Australian gas liquefaction plants, gas liquefaction may remain at high levels until the end of the year, Ivan Timonin, a senior consultant at Implementa, said in a commentary.
Gas quotes on the London ICE exchange on Wednesday for the first time since June 21 crossed the threshold of $450 per thousand cubic meters and during trading grew by 40%, rising to almost $500. This is four times lower than in the first half of August last year, but twice as high as the average in August in 2017-2021.
The key factor behind the rise in these quotes in recent days is the risk of strikes at Australian liquefied natural gas (LNG) plants, Timonin believes. He connects such a significant effect of workers' plans with two reasons.
Firstly, in the context of Europe's desire to replace the supply of Russian pipeline gas, demand for LNG continued to grow this year, while there were no major commissioning of new production assets this year, and therefore the global market as a whole remains in short supply, the agency's interlocutor explains.
Secondly, Australia is the second largest LNG producer in the world after the US, its share in the global market this year is close to 20%, the expert notes. At the same time, Woodside and Chevron, whose workers are planning strikes, are among the key players in the country, they own shares in Australian plants with a total capacity of 46 million tons, that is, half of all production capacities — Gorgon, North West Shelf, Pluto LNG and Wheatstone, continues Timonin.
Strikes on Australian assets were held in the past, the expert recalled. So, for example, at the Shell Pluto LNG plant in the summer of 2022, it took more than two months — 76 days. «Thus, if the companies fail to reach an agreement with the unions, prices will remain at high levels at least until the end of the year,» he stated.