Taiwan is set to significantly increase its imports of liquefied natural gas (LNG) from the United States, with expectations that more than 20% of its total LNG supplies will come from the U.S. this year, compared to 10% in the previous year. This move is part of Taiwan’s strategy to diversify its energy sources and enhance energy security, with projections indicating that the U.S. share could reach 25% by 2029, according to Taiwan’s Minister of Economic Affairs, Kung Ming-hsin.
Negotiations are underway to secure supplies from an LNG project in Alaska, which could potentially increase the U.S. share to 30% or more by 2032, contingent on the project’s progress. The plan involves CPC Corp, Taiwan, potentially investing up to US$4.4 billion and purchasing around six million tonnes of LNG annually once production commences. However, the final investment, ownership stake, and contractual terms are still under negotiation.
Taiwan’s government aims to secure long-term energy supplies in response to growing domestic natural gas demand. The country plans to add 25 large gas-fired power units by 2035, necessitating reliable fuel sources. Kung emphasized that long-term LNG contracts could mitigate price volatility and improve 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 funding for this investment will depend on the final project structure, timeline, and CPC Corp’s financial position. Potential funding sources include capital injections, retained earnings, and loans, with payments expected to be made progressively as the project advances.
Increasing energy imports from the United States could also help address Taiwan’s growing trade surplus with the U.S., noted Kung. This initiative reflects Taiwan’s broader efforts to bolster its energy security and economic relations amidst evolving global energy dynamics.