Woodside’s Pluto 2 Expansion Faces Critical Delays as 1,800 Workers Reject Pay Deal

Woodside Energy is facing mounting pressure over the schedule for its Pluto 2 liquefied natural gas expansion, as regulators consider whether to grant unions permission to undertake industrial action. The project is central to Woodside’s next phase of growth, yet construction could be disrupted at a critical stage because Bechtel—the main contractor—and its workforce remain far apart on pay issues. Should the Fair Work Commission approve the unions’ request, a strike could begin within the coming months, potentially slowing work just as the development approaches completion.

Roughly 1,800 construction workers are involved in the dispute, and they have overwhelmingly dismissed the latest compensation proposal. Bechtel’s offer of a 5% wage increase was rejected by more than four-fifths of employees. According to the Offshore Alliance—representing both the Maritime Union of Australia and the Australian Workers Union—talks have reached an impasse, leaving industrial action as the unions’ main option for pressing their claims before year-end.

The central issue is a pronounced pay discrepancy compared with other major LNG operations in Western Australia. Union representatives say that workers on Pluto 2 earn about one-third less per hour than comparable roles at Chevron’s Wheatstone plant after adjusting for inflation and CPI changes. To address this, they are seeking an increase of close to 30%. Neither Woodside nor Bechtel has publicly commented on the specifics of these demands, but union officials report that most workers are prepared to support legally protected action.

A lengthy strike would create significant risk for the project’s commissioning timeline. Woodside stated in an October update that Train 2—the second processing line—had passed the 90% completion mark. The expansion will process gas from the Scarborough reservoir and is designed for an annual capacity of around 5 million metric tons. The original Pluto facility has shipped more than 500 cargoes since coming online, but the timely delivery of the second train remains essential to achieving first production and exports in the latter half of 2026.

Despite the labor dispute, Woodside continues to emphasize its longer-term expansion strategy, driven by increasing demand for LNG across Asian markets. At its Capital Markets Day, Chief Executive Meg O’Neill detailed plans to raise combined oil and gas sales by roughly 50% by 2032. Under these projections, total LNG capacity would rise from 19 million tons in 2024 to as much as 40 million tons early next decade.

Pluto 2 plays a critical role in reaching those targets. Woodside expects net operating cash flow to grow from about $5.8 billion in 2024 to nearly $9 billion by 2032. With output projected to reach 300 million barrels of oil equivalent through an annual growth rate of roughly 6%, resolving the labor dispute is essential to securing the revenues that underpin the company’s long-term plans.