Taiwan is set to significantly increase its imports of liquefied natural gas (LNG) from the United States, with expectations that U.S. supplies will account for over 20% of Taiwan’s total LNG imports this year, up from 10% in the previous year. This move is part of Taiwan’s broader strategy to diversify its energy sources and bolster energy security through long-term contracts that can help mitigate price volatility and ensure a stable supply.

According to Taiwan’s Minister of Economic Affairs, Kung Ming-hsin, the share of U.S. LNG in Taiwan’s imports is projected to rise to 25% by 2029. Furthermore, ongoing negotiations to secure supplies from an LNG project in Alaska could potentially increase the U.S. share to 30% or more by 2032, contingent on the project’s progress.

The national oil and gas company, CPC Corp, Taiwan, is considering an investment of up to US$4.4 billion in the Alaska project, with plans to purchase approximately 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 negotiation.

As Taiwan’s demand for natural gas continues to escalate, largely driven by the planned addition of 25 large gas-fired power units by 2035, the need for reliable energy sources becomes increasingly critical. Minister Kung emphasized that Alaska’s proximity to Taiwan, with an estimated shipping time of about 10 days, could offer advantages in terms of reduced transportation time and associated risks.

The financing of this investment will depend on the eventual project structure, timeline, and CPC Corp’s financial status. Potential funding avenues include capital injections, retained earnings, and loans, with payments anticipated to be made incrementally as the project develops.

Moreover, the increased purchase of U.S. LNG could assist in narrowing Taiwan’s trade surplus with the United States, providing an economic benefit alongside the strategic energy considerations.