Norwegian strike could cut gas exports by 13%

A planned strike by members of Norway's Lederne workers' union in the next few days could cause the loss of around 13% of the country's gas exports, the Norwegian Oil and Gas Association (NOG) warned on July 3.

Lederne members on June 30 voted down a proposed wage settlement that had been negotiated by companies and union bosses. As a result,74 members will down tools on July 5 at the Gudrun, Oseberg South and Oseberg East fields, resulting in their closure. 

Unless there is a breakthrough in talks, the union has said the strike will be extended on July 6 to 117 workers at the Heidrun, Aasta Hansteen and Kristin fields, causing their shutdown as well. In addition, the Tyrihans field will also have to close as it relies on Kristin to handle its output.

"The result will be a daily loss of oil output totalling 130,000 barrels, while gas production will fall by 292,000 barrels of oil equivalent/day, or 13% of the total for the Norwegian continental shelf," NOG said.

Norway's IE and Safe unions, which combined represent about 85% of operators' employees working on the shelf, both signed up to pay agreements last month, averting an even larger strike. This left only Lederne, which represents the remaining 15%.

The strike comes at a time when European gas markets are already incredibly tight, especially for the time of year, as a result of disruptions in Russian gas supply via the Nord Stream 1 pipeline, as well as Gazprom's decision to cut off supply completely to a number of buyers.

The August contract at the Dutch TTF gas hub has been climbing since June 24, starting at €129.3 ($135)/MWh that day and reaching €147.8/MWh on July 1. As of 13:20 GMT on July 4, it is up 8.5% versus the average for the previous session, trading at over €160/MWh.