Taiwan is set to increase its imports of liquefied natural gas (LNG) from the United States, with expectations that the US will supply more than 20% of Taiwan’s total LNG demand this year, up from 10% last year. This move is part of Taiwan’s broader strategy to diversify its energy sources and enhance energy security, according to Taiwan’s Minister of Economic Affairs, Kung Ming-hsin.
The share of US LNG in Taiwan’s energy portfolio is forecasted to reach 25% by 2029. Furthermore, negotiations are underway to secure additional supplies from an LNG project in Alaska, which could potentially raise the US share to 30% or more by 2032, contingent on the project’s progress.
Under the proposed plan, CPC Corp, Taiwan, could invest as much as US$4.4 billion to purchase roughly six million tonnes of LNG annually once production is underway. However, the specifics regarding the final investment amount, ownership stake, and contractual terms remain under discussion.
Taiwan’s government is focused on securing long-term energy supplies to meet the rising demand for natural gas, driven by plans to add 25 large gas-fired power units by 2035. Kung highlighted that long-term LNG contracts could mitigate price volatility and enhance supply stability. Additionally, Alaska’s proximity to Taiwan, with an estimated shipping time of about 10 days, could reduce transportation time and associated risks.
The investment in the US LNG project will be structured based on the final project framework, timeline, and CPC Corp’s financial position. Potential funding sources for the investment include capital injections, retained earnings, and loans, with payments to be made in stages as the project advances.
Increasing energy imports from the United States is also seen as a way to help balance Taiwan’s growing trade surplus with the US, Kung noted. This strategic move underscores Taiwan’s commitment to securing a stable and diversified energy supply for its future needs.