Taiwan is set to significantly boost its imports of liquefied natural gas (LNG) from the United States, with expectations that American LNG will account for more than 20% of its total imports this year, a marked increase from 10% in the previous year. This move is part of Taiwan’s broader strategy to diversify its energy sources and enhance energy security, with plans to increase the U.S. share to 25% by 2029.
Minister of Economic Affairs Kung Ming-hsin highlighted that ongoing negotiations for supplies from an LNG project in Alaska could further elevate the U.S. share to 30% or more by 2032, contingent on the project’s progress. Under this proposal, CPC Corp, Taiwan, may invest up to $4.4 billion and purchase around six million tonnes of LNG annually once production commences. However, the specifics of the investment, including the final amount, ownership stake, and contractual terms, are still under discussion.
The Taiwanese government is keen on securing long-term energy supplies as the country’s demand for natural gas continues to rise. Plans to add 25 large gas-fired power units by 2035 are expected to necessitate a steady and reliable fuel supply. Minister Kung noted that long-term LNG contracts could mitigate price volatility and stabilize supply. Additionally, the relatively short shipping time from Alaska, estimated at around 10 days, could decrease transportation risks and costs.
The financial structure of the investment will depend on the final project arrangement, timeline, and the financial standing of CPC Corp. Potential funding sources include capital injections, retained earnings, and loans, with payments likely to be made in stages as the project advances.
Beyond energy security, increased LNG imports from the U.S. could also help in addressing Taiwan’s growing trade surplus with the United States, according to Kung. This strategic move underscores Taiwan’s commitment to strengthening its energy infrastructure while maintaining balanced trade relations with key partners.