Shell has canceled gas shipments from its offshore facility Prelude because of an industrial dispute between the unions and the Anglo-Dutch resources company.
The contractors who were to fly out to the resources rig on Wednesday were told to stand down because of the disagreements over pay increases, rostering and job security.
Shell has told customers they will be cancelling gas shipments from the facility until mid-July due to the dispute.
Shell said it had issued a notice to customers that their cargoes would be impacted by the industrial action until at least mid-July.
The rise in gas prices is due to a shortage of supply and the war in Ukraine.
The LNG facility, located 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 was temporarily shut down after a fire was detected onboard in December last year, but was later cleared by the industry regulators and brought back online in April this year.
The Australian Workers Union and Maritime Workers Union 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 new set of Fair Work Commission approved bans is set to come into effect from July 1.
The bans would result in the union members not turning turbines at the facility back on if they were tripped, raising concerns that the rig could be shut off temporarily if that happened.
Australian Workers Union secretary Daniel Walton said that the unionised members prioritised safety and wouldn't do anything to jeopardise crew onboard the facility.
He said that we fundamentally deny that in any way, shape or form, we would do anything to jeopardise the safety of the facility, any workers on board or the broader environment.
Shell is putting out misinformation as a way to justify industrial extremism, he said.
Mr Walton said Shell had threatened to shut down the facility and was using 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.
The dispute causing tensions onboard the facility centers around pay rises for workers on board, job security and superannuation increases.
The unions started negotiating pay rises in 2020, but tensions have boiled over after talks stalled and new industrial action was approved for July.
He said Shell is not offering any pay increases.
In fact, Shell has a position in place member that says 25 per cent of our members' salaries will be discretionary. Shell said in a statement that the company recognises the rights of workers, 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.
We continue to engage with our people and our representatives and to always be transparent and respectful at all times during the bargaining process.