GAS REPORT: Santos' GLNG project at Curtis Island.
GAS REPORT: Santos' GLNG project at Curtis Island.

Tariff could give boost to Island projects running at 78%

A TRADE war between China and the United States over liquefied natural gas could give Australian projects an edge to secure new international contracts, as Curtis Island's "big three" continue to run below full capacity.

China has threatened to slap a 25 per cent tariff against US LNG as part of a $60 billion response to President Donald Trump's recent suggestion of a further US$200 billion in tariffs against China.

Respected gas analysts EnergyQuest said in its July report that a tariff on US LNG would make it less competitive in China.

EnergyQuest chief executive Graeme Bethune said this would give exporters in Qatar, Australia and Russia an edge in securing contracts with China.

More confidence in Australia's LNG export market could give a boost to the $70 billion Curtis Island projects Australia Pacific LNG, Gladstone LNG and Queensland Curtis LNG.

Mr Bethune estimated in July the plants operated at 19.7 million tonnes per annum, 78 per cent of capacity.

"East coast projects continued to languish at well below capacity, notwithstanding strong LNG prices," Mr Bethune said.

"Annualised LNG production was about 2% below the level required to meet long-term contracts."

The report said Australia, the world's second-biggest LNG exporter, has several major long-term purchase deals with China already, delivering an estimated 49 per cent of China's imports in June.

With China recently signing an LNG import deal with Papua New Guinea, Mr Bethune said it seemed unlikely the country would sign any more US contracts.

Globally, EnergyQuest estimates that Australia exported 6.29 million tonnes of LNG last month, a total of 93 cargoes, up by 12 cargoes in June. QCLNG shipped nine cargoes, APLNG 10 cargoes and GLNG six in July.