Taiwan is set to significantly increase its imports of liquefied natural gas (LNG) from the United States this year, with the share rising to over 20% of its total LNG supplies, up from 10% last year. According to Taiwan’s Minister of Economic Affairs, Kung Ming-hsin, this shift is part of a broader strategy to diversify energy sources and enhance energy security.
Looking further ahead, Taiwan aims to boost U.S. LNG imports to 25% by 2029, and potentially to 30% or more by 2032, contingent on the progress of negotiations related to an LNG project in Alaska. This increase in imports is in line with Taiwan’s growing natural gas demand, driven by plans to add 25 large gas-fired power units by 2035, necessitating stable and reliable fuel sources.
Under the proposed arrangement, CPC Corp, Taiwan, could invest up to $4.4 billion and commit to purchasing about six million tonnes of LNG annually once production from the Alaska project begins. However, the final details of the investment, including ownership stakes and contractual terms, are still under negotiation.
Kung emphasized that long-term LNG contracts are crucial for reducing price volatility and ensuring supply stability. Additionally, Alaska’s geographic proximity to Taiwan, with an estimated shipping time of approximately 10 days, could further reduce transportation risks and costs.
The financial backing for this investment will depend on the project’s final structure and timeline, as well as CPC Corp’s financial standing. Potential funding sources include capital injections, retained earnings, and loans, with payments expected to be phased as the project advances.
Moreover, increasing U.S. LNG imports could help address Taiwan’s trade surplus with the United States, offering potential economic benefits alongside energy security improvements.