Taiwan is set to significantly increase its liquefied natural gas (LNG) imports from the United States this year, with expectations that American LNG will account for over 20% of its total LNG supplies, up from 10% last year. This move is part of Taiwan’s broader strategy to diversify its energy sources and enhance energy security. By 2029, the share of US-sourced LNG is projected to rise to 25%.
The announcement was made by Taiwan’s Minister of Economic Affairs, Kung Ming-hsin, who highlighted ongoing negotiations to secure additional supplies from an LNG project in Alaska. Should these discussions prove successful, the US share of Taiwan’s LNG imports could reach 30% or more by 2032, contingent upon the progress of the project.
Under the proposed plan, CPC Corp, Taiwan, may invest up to US$4.4 billion to purchase approximately six million tonnes of LNG annually once production initiates. The details regarding the final investment amount, ownership stake, and contractual terms are still under negotiation.
As Taiwan’s demand for natural gas continues to grow, the government is eager to secure long-term energy supplies. This demand is expected to surge with the planned addition of 25 large gas-fired power units by 2035, necessitating stable and reliable fuel sources. Minister Kung emphasized that long-term LNG contracts could mitigate price volatility and improve supply stability.
Alaska’s proximity to Taiwan, with an estimated shipping time of around 10 days, offers logistical advantages that could reduce transportation time and associated risks. The financial structure of the investment will depend on the final project setup, timeline, and CPC Corp’s financial capacity, with funding potentially coming from capital injections, retained earnings, and loans. Payments are expected to be made progressively as the project advances.
Additionally, increasing energy imports from the United States could contribute to narrowing Taiwan’s growing trade surplus with the country, according to Kung. This strategic move underscores Taiwan’s commitment to diversifying its energy portfolio while strengthening its trade relationships.