Taiwan is set to increase its imports of liquefied natural gas (LNG) from the United States, with the American share expected to surpass 20% of Taiwan’s total LNG supplies this year, doubling from 10% last year. This move is part of Taiwan’s strategy to diversify its energy sources and enhance energy security, according to Taiwan’s Minister of Economic Affairs, Kung Ming-hsin.
The government projects that the U.S. share of Taiwan’s LNG imports could reach 25% by 2029. Kung stated that ongoing negotiations regarding an LNG project in Alaska might further boost the U.S. share to 30% or more by 2032, contingent on the project’s progress. Under this plan, CPC Corp, Taiwan, may invest up to $4.4 billion and purchase approximately six million tonnes of LNG annually once production commences. However, the specifics of the investment, such as the final amount, ownership stake, and contractual terms, are still under negotiation.
Taiwan’s growing demand for natural gas, driven by plans to add 25 large gas-fired power units by 2035, has heightened the need for stable and reliable fuel sources. Kung emphasized that securing long-term LNG contracts could mitigate price volatility and strengthen supply stability. The geographical proximity of Alaska to Taiwan, with an estimated shipping time of around 10 days, is expected to reduce transportation time and associated risks.
The financial structure for this investment will be determined based on the final project framework and CPC Corp’s financial standing. Potential funding avenues include capital injections, retained earnings, and loans, with payments scheduled to be made incrementally as the project progresses.
In addition to enhancing energy security, increasing LNG imports from the United States could also help reduce Taiwan’s trade surplus with the country, Kung noted. This strategic energy partnership underscores Taiwan’s commitment to securing its energy future while managing international trade relations.