World’s biggest ship shuts down LNG production amid industrial dispute

An industrial dispute has led to the shutdown of Shell’s Prelude floating LNG facility 475 kilometres off Australia’s north-west coast.

A Shell spokeswoman confirmed production on the facility had been suspended and much of its 350-strong workforce was being demobilised due to work bans in force from industrial action.

“Production on the Shell-operated Prelude floating LNG facility has been temporarily suspended due to work bans currently in force under protected industrial action by members of the Australian Workers’ Union and Electrical Trades Union that prohibit offtake activities,” the spokeswoman said.

“Until the bans on the offtake of cargoes are lifted and the plant can be safely restarted, staff required to perform safety-critical functions will remain on board while all other workers will be demobilised.

“Shell recognises the entitlement of all workers to exercise their rights, including the right to participate in industrial action. The safety and welfare of people on our sites remain our highest priority.”

Prelude employees, unions and Shell are engaged in a bitter industrial dispute over a new enterprise agreement.

The Offshore Alliance, an alliance between the AWU and Maritime Union of Australia, said an earlier proposal by Shell was rejected by 95 per cent of employees.

Shell had already reduced production at the plant to 34 per cent of capacity in June and told customers a fortnight ago it was cancelling shipments from the facility until mid-July because of the dispute.

The move will be a costly one for Shell, which will prevent it from selling any product in a high-price environment caused by Russia’s invasion of Ukraine and subsequent bans on using Russian sources of oil and gas.