Shell has cancelled gas shipments from its offshore facility Prelude as an industrial dispute between unions and the Anglo-Dutch resources company come to a head.
Contractors set to fly out to the resources rig on Wednesday were told to stand down in response to the disagreement over pay increases, rostering and job security.
The dispute has also caused Shell to advise their customers they will be cancelling some gas shipments from the facility until mid-July.
"Shell confirmed it had issued a notice to customers that cargoes would be impacted until at least mid-July due to the industrial action," a Shell spokesperson said.
The developments come as gas prices rise due to a shortage in supply and the war in Ukraine.
The LNG facility, 400 kilometres off the Kimberley coast, was brought online in 2019, but has been plagued by technical problems, safety concerns and cost blow outs.
The facility shut down temporarily after a fire was detected onboard in December last year but was later cleared by the industry regulator and brought back online in April this year.
Concerns rig will shut down
The Australian Workers Union and Maritime Workers Union form the Offshore Alliance and have been pushing for pay increases for members aboard the facility.
Industrial action has been taking place onboard the vessel since early June, but a fresh set of Fair Work Commission approved "bans" is set to come into effect from July 1.
Two of the bans would result in union members not turning turbines at the facility back on if they were "tripped", raising concerns the rig could be shut off temporarily if that happened.
But Australian Workers Union secretary Daniel Walton said unionised members prioritised safety and wouldn't do anything to jeopardise crew onboard the facility.
"We fundamentally deny that in any way shape or form we would do anything to jeopardise the safety of the facility, any workers onboard or the broader environment," he said.
"Shell is putting out misinformation as a way to try to justify, I think, this industrial extremism," he said.
Mr Walton said Shell had threatened to shut down the facility and was using those threats as a "tactic" in the ongoing dispute between workers and the company.
"Instead of sitting down to offer a decent pay rise they seem to be escalating their action against their workforce," he said.
Pay dispute escalates tensions
The dispute causing tensions onboard the facility centres around pay rises for workers onboard, job security and superannuation increases.
The unions started negotiating pay rises in 2020, according to Mr Walton, but tensions have boiled over after talks stalled and fresh industrial action was approved for July.
"Unfortunately Shell are not offering any pay increases," he said.
"In fact [Shell] have a position in place member which says that 25 per cent of our members' salaries will be discretionary."
Shell said in a statement the company "recognises the entitlement of all workers to exercise their rights, including the right to participate in industrial action".
"We work hard to provide a strong employee value proposition for our employees, which is competitive with industry peers," the statement reads.
"We continue to engage with our people and their representatives and remain committed to acting fairly, respectfully and transparently at all times during the bargaining process."
