(Bloomberg) -- North Asian liquefied natural gas buyers aren’t yet moving to prepare for potential supply disruptions caused by expected strikes in Australia.
China and Japan, who are major buyers of Australian gas, are sitting on sufficient inventories as they enter the period between summer and winter when demand is weaker, according to traders. There are also expectations that a deal with the unions will be reached before strikes significantly curb output.
Unions at two of Chevron Corp.’s LNG export plants in Australia threatened to stop work from Sept. 7 if a deal on pay and conditions isn’t agreed. Industrial action may not immediately affect production, but prolonged strikes increases the risk of disruption. The plants made up about 7% of global LNG output last year.
The threat to supply has rocked global gas markets this month, sending prices surging and then plummeting on every little development. Traders — particularly those in Europe — feared that a disruption to exports will tighten global supply, prompting a bidding war between Asia and Europe for shipments of the power-station and heating fuel.
Those fears have yet to materialize, amid lackluster spot buying interest across North Asia. Japan’s LNG inventories rose over the last week and are in line with the five-year average. China’s stockpiles at import terminals may hit 90% of storage capacity in the coming month, Qingneng Consultant said earlier in August.
North Asian buyers are expected to increase spot purchases if Chevron’s Gorgon and Wheatstone projects are forced to cancel or delay shipments under long-term contracts. However, it isn’t clear when or if LNG exports will be affected by the strikes. Chevron hasn’t made any changes to loading schedules, traders said.
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