Wholesale gas prices in Europe have fallen after a planned strike at Australia’s largest liquefied natural gas plant looked to have been averted.

The walkout at Woodside Energy’s North West Shelf plant had threatened to disrupt global LNG supplies, driving up gas prices sharply.

But on Thursday the firm reached an agreement in principle with unions, which it is hoped will halt the strike.

Benchmark EU and UK gas prices are down almost 33% since their peak on Tuesday.

Employee representatives at the North West Shelf plant said they were “supportive of the in-principle agreement” with Woodside Energy and would vote to ratify the deal at 7.30 pm Perth time (11:30 GMT).

“It’s pleasing that Woodside has made our members a strong offer without industrial action being taken,” union alliance spokesman Brad Gandy said.

Following the start of the war in Ukraine, Russia slashed supplies of natural gas to Europe, which led countries to seek out alternative sources of energy.

Many countries are relying on LNG to fill the gap, with Australia being one of world’s largest exporters.

It has led to a gradual fall in global gas prices and energy bills, which soared in 2022.

However, the prospect that workers at the North West Shelf plant might walk out on 2 September sparked fears that prices would start to rise again.

Last week, analysts at Cornwall Insight predicted the uncertainty would contribute to a rise in the price cap set by the UK’s energy regulator – which limits what suppliers charge consumers per unit of energy – next year.

The cap means the typical annual household bill currently stands at £2,074, but October’s cap, which will be announced on Friday, is forecast to fall slightly to £1,926.

However, Cornwall forecast the cap would rise to £2,082.56 in January. The analyst says it will be issuing a fresh forecast on Friday.

Woodside said it would continue to work with the unions to finalise the agreement.

“Substantial progress was made at talks held on Wednesday and the parties have reached in-principle agreement on a number of issues that are key to the workforce,” it added.

Workers at two other offshore LNG facilities in Australia, Gorgon and Wheatstone, operated by Chevron, voted to endorse possible strike action on Thursday.

Together with the North West Shelf site, the plants make up about 10% of the world’s supply of LNG.

However, energy analyst Saul Kavonic told Reuters that the risk of industrial action at Chevron’s facilities was unlikely to significantly disrupt supplies.