Inpex Ichthys LNG union Strike Looms as 326 Workers Prepare May 27 Walkouts

The Offshore Alliance served a union strike notice at Inpex's Ichthys LNG facility from May 27 to June 10. The Silicon Review reports on 326 workers demanding better pay as Japan faces a potential supply crunch ahead of summer.

The Offshore Alliance has officially served a notice of strike at Inpex’s Ichthys liquefied natural gas (LNG) facility in northern Australia, with workers set to walk off the job from May 27 through June 10 after months of stalled negotiations over pay and working conditions.

An overwhelming 326 out of 346 unionized workers at the 9.3 million-metric-ton-per-year facility near Darwin voted last month to authorize union strike action. The Offshore Alliance, a grouping of the Maritime Union of Australia & the Australian Workers Union, said it had made clear to Inpex that it “will not accept the shortchanging of our bargaining demands simply because Inpex couldn’t be bothered to read our claims for six months.” 

The two sides are scheduled to hold final negotiation meetings on May 25 and 26. If no agreement is reached, the strike could begin immediately thereafter, potentially lasting two weeks.

The industrial action comes at a precarious moment for global energy markets. The Iran war has already choked off significant LNG supplies through the Strait of Hormuz, while Qatar one of the world’s largest LNG producers has seen its export capacity damaged by Iranian strikes. Australia has effectively become the world’s second-largest LNG exporter amid the crisis.

Japan is particularly vulnerable. Australia is Japan’s biggest LNG supplier, and Japanese power and gas utilities that are Ichthys LNG’s main customers are closely monitoring the situation. With summer approaching and air-conditioning demand set to spike, Japan already faces a potential supply crunch exacerbated by the Middle East conflict.

The threat of strike action follows a pattern of industrial disputes across Australia’s LNG sector. In 2023, workers at Chevron’s Gorgon and Wheatstone facilities which account for more than five percent of global LNG supply staged strikes that roiled global gas markets. Those disputes were eventually resolved after Australia’s Fair Work Commission brokered terms that both sides accepted.

Separately, the Australian government has moved to shore up domestic supply. Energy Minister Chris Bowen announced that major gas exporters will be forced to set aside 20 percent of their export production for domestic use to shield Australians from global price volatility. The scheme is set to take effect in July 2027.

The Silicon Review’s analysis indicates that a prolonged strike at Ichthys could push Asian LNG spot prices higher just as Japan enters peak summer demand season a worst-case scenario for Japanese utilities already grappling with record-high energy costs and tight supply buffers.

Q: When will the union strike at Inpex’s Ichthys LNG facility begin?
A: The Offshore Alliance served a strike notice effective from May 27 through June 10. If final negotiations on May 25 and 26 fail, workers could walk off the job immediately after.

Q: How many workers voted for strike action at Ichthys LNG?
A: 326 out of 346 unionized workers at the 9.3 million-metric-ton-per-year facility near Darwin voted to authorize strike action over pay and working conditions.

Q: Why is the Ichthys LNG strike concerning for Japan?
A: Australia is Japan’s largest LNG supplier, and Japanese utilities are Ichthys LNG’s main customers. With summer driving up air-conditioning demand and the Iran war already disrupting global LNG supplies, Japan faces a potential energy supply crunch.

Q: What is the Offshore Alliance?
A: The Offshore Alliance is a grouping of the Maritime Union of Australia and the Australian Workers Union. It represents workers at Australia’s major offshore oil and gas facilities, including Ichthys LNG, Chevron’s Gorgon and Wheatstone, and Woodside’s North West Shelf.

Q: Has Australia taken steps to protect its domestic gas supply?
A: Yes. Energy Minister Chris Bowen announced that major LNG exporters will be required to reserve 20 percent of their export production for domestic use, effective July 2027, to shield Australians from global price volatility.

Q: How much LNG does the Ichthys facility produce annually?
A: The Ichthys LNG facility near Darwin produces approximately 9.3 million metric tons of LNG per year, making it one of Australia’s largest liquefied natural gas export facilities.