LNG Workers at Projects in Australia Approve Labor Agreement

Union members working on more than $60 billion in natural gas export projects in Australia for energy companies including ConocoPhillips approved a labor agreement, easing concerns of delays to first production.

About 54 percent of workers voted for Bechtel Group Inc.’s revised offer, according to an e-mailed statement today from the San Francisco-based contractor. The agreement included a 13 percent increase in pay and extra daily allowances.

A dispute with unions in Queensland state has put the schedules of three liquefied natural gas projects at risk. BG Group Plc plans to start its export project on Curtis Island later this year, while Santos Ltd. and ConocoPhillips expect to begin production at their developments in 2015.

“People will breathe a sigh of relief” with a yes vote, Mark Samter, a Sydney-based analyst at Credit Suisse Group AG, said by phone yesterday before the results. “But I don’t think the grievances they feel disappear. You’d have to question what productivity is like at a crucial stage.”

Bechtel said today the vote meant everyone could return to their normal work routines. About 3,700 workers voted in favor of the agreement, while about 3,120 voted against it, the contractor said in a separate e-mail.

Origin Energy Ltd., ConocoPhillips’s partner in one of the LNG projects, climbed 0.1 percent to A$14.06 in Sydney trading. Santos shares closed unchanged at A$14.40.

Fly-In, Fly-Out

The average tradesman working on the island and living locally made an estimated A$200,000 ($187,000) last year, including wages of A$160,000, daily payments and retirement fund contributions, based on figures provided by Bechtel. The average laborer earned A$135,000, according to Bechtel, and would have made about A$175,000 in total compensation.

The contractor wouldn’t agree to union demands to make an immediate reduction in the number of weeks fly-in, fly-out employees work for every week off. The contractor agreed to change the rosters in the future to three weeks on and one week off, from four weeks currently. Doing that at this point in the construction wasn’t negotiable, Bechtel said.

While the workers can’t pursue protected industrial action now, the Construction, Forestry, Mining and Energy Union, which started action at the site earlier this month, is considering its options, Jade Ingham, its assistant secretary in Queensland, said today by phone. “The fight’s not over.”

Working four weeks before getting a week off puts “enormous pressure” on families, the union said last month.

“There is no doubt the actions of the CFMEU and others over the past week have caused some disruptions for our employees coming to and from work, some interruptions to work on the projects and concern and frustration in the community,” Kevin Berg, Bechtel general manager in Gladstone, Queensland, said in the statement. “But our employees have had their say.”

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