Aerial View of Curtis Island, LNG sites. Gladstone.
Aerial View of Curtis Island, LNG sites. Gladstone. Brenda Strong

Gladstone's LNG helping China tackle air pollution crisis

SHIPMENTS of liquefied natural gas from Gladstone are helping China make inroads at tackling its air pollution crisis.

Respected oil and gas analysts EnergyQuest said China's efforts to cut air pollution, particularly in Beijing, by forcing millions of homes and businesses to switch from coal to natural gas already had positive results.

A recent Greenpeace report said concentrations of PM2.5 - particles that pose the greatest health risks - plunged 33 per cent in the last quarter of 2017, compared to the same period in 2016.

"According to the (Financial Times) the government has now offered additional incentives, including loans from the Chinese-backed Asian Infrastructure Investment Bank, to extend the natural gas infrastructure," EnergyQuest chief executive Graeme Bethune said.

"The anti-pollution plan is expected to increase China's gas use significantly over the long term."

During the 2017 calendar year China imported almost 13 million tonnes of coal from Gladstone and 11.5 million tonnes of LNG.

Despite its "anti-coal" movement, its 2017 coal imports were two million tonnes higher than what was shipped to China from Gladstone in 2016.

Meanwhile its LNG shipments increased by three million tonnes between 2016- 17.

The report said China and India, two of the "Gladstone three's" biggest customers, would be "particularly sensitive" to moves to restrict exports from Gladstone.

LNG producers and international customers feared the Federal Government's potential export controls when it announced new measures to put pressure on companies supplying more gas to the domestic market.

In the December report Mr Bethune said the record LNG exports from Gladstone last month (two million tonnes) did not appear to have a negative impact on the domestic market.

LNG exports increased by three million tonnes, taking the total for the year to 24 million tonnes.

EnergyQuest said exports could rise again next year with QCLNG expected to reach full production.

"Queensland continued to import gas from other states but at a relatively modest level," Mr Bethune said.

"On an annualised basis east coast plants operated at 24.0 Mtpa in December, 93% of nameplate capacity of 25.3 Mt, significantly above the 2018 rate assumed by the ACCC of 20.7 Mt."

Last year Santos-owned GLNG, Origin's Australia Pacific LNG and Shell's QGC committed to supplying more gas to the domestic market, to help reverse the looming shortage.