kuzmaphoto/Shutterstock Save for later Print Download Share LinkedIn Twitter With US LNG representing the world's swing cargoes, a market disturbance anywhere can impact where those ships are sent. So the potential worker strike at the Chevron-operated Wheatstone and Gorgon LNG plants in Western Australia could shift destination-flexible US cargoes from a European to a more Asia focus.The Offshore Alliance served Chevron with a formal notice of "protected industrial action" on Aug. 28 after employees at the two LNG plants, as well as the Wheatstone offshore platform, endorsed the work stoppage.Strike actions will start on Sep. 7, putting at risk up to 6.5% of global LNG exports depending on the extent of the strike, according to data from analytics firm Kpler. Gorgon and Wheatstone have a combined 24.5 million tons per year (3.5 billion cubic feet per day) of liquefaction capacity.Roughly 48% of US LNG volumes reached Asia in 2021, while 34% went to Europe. In 2022, in the wake of the Russian invasion of Ukraine, that dynamic flipped, with 69% bound for Europe and 25% for Asia. This shift occurred despite industrial action at Australia's 3.6 million ton per year (0.5 Bcf/d) Prelude liquefaction unit, which would otherwise have pulled some US LNG to Asia.A strike at Chevron's Australian assets would involve far more LNG than Prelude, meaning diversion of US LNG to Asia may be significant. But that shift might be blunted by a spike in European demand — and prices — if the winter is unusually cold, as the bloc cannot rely anymore on piped Russian gas.Upper Hand?Industrial actions may take many different forms, and while a full-blown strike cannot be ruled out, it is not analysts’ base case scenario. At this point, unions are planning on conducting rolling stoppages, bans and limitations which will escalate each week until an agreement has been reached, the Offshore Alliance said in a statement.The Offshore Alliance strongly criticized Chevron for proposing a “dodgy non-union EA [enterprise agreement]” without going through the bargaining process and said it is “about to cost them billions in lost production and profit.”Analysts concur that Chevron is not in a strong position to negotiate with unions; the ongoing developments come after successful negotiations at the Inpex-operated Ichthys LNG plant and an over two month-long strike at Prelude resulted in better pay and working conditions last year, setting a new benchmark for the sector.“We now have three precedents across Ichthys, Prelude and North West Shelf, so it’s likely an accommodation on similar terms is reached with Chevron, too,” Credit Suisse analyst Saul Kavonic said on X, formerly Twitter. It is also not in Chevron’s financial interest for a strike to happen, as the revenue stream from Gorgon and Wheatstone far exceeds the cost of settling the action, Australian consultant EnergyQuest indicated in a recent report.Anticipatory Volatility Whether or not a strike happens, global gas pricing volatility is already occurring even though cargoes have not been canceled and production has not been interrupted at any of the facilities. That is partly attributable to rhetoric that has ramped up as the Chevron negotiations get underway “as a normal part of the Australian union bargaining process,” Kavonic said. The current price swings are already complicating winter restocking efforts globally, but its effects could be more limited than initially expected. Gas and LNG stocks are well supplied in the Atlantic and Pacific basins, with the EU already surpassing its 90% filling target for its underground storage facilities ahead of schedule and LNG stocks also relatively high in Northeast Asia.In Japan, however, LNG inventories have been on a free fall since mid-July and could end up in a precarious situation if the strikes materialize. Wheatstone and Gorgon represent 7.79 million tons, or over 18%, of Japan's LNG supplies since the beginning of the year. Japanese LNG stocks are now at 1.81 million tons, lower than the five-year average, as the country deferred the delivery of contracted summer cargoes to the northern hemisphere winter season to meet its heating needs, a source said.