Taiwan cites progress on Alaska LNG after Trump says it will buy 30% of output

Taiwan said on Wednesday it was making progress in talks to buy LNG from Alaska and would invest $4.4 billion in the project after US President Donald Trump ‌told a rally in the state that Taipei would buy 30% of its output. Taiwan's economy ministry said state-owned energy firm CPC Corp has made significant progress with the project developer after nearly a year and a half of negotiations and evaluation.

Alaska LNG, which would produce 20 million metric tons annually, has been discussed for decades, but ‌many in the industry are sceptical about its commercial viability given that it requires a lengthy pipeline and capital that mean it would cost more than double ‌a comparable US Gulf Coast plant, analysts have said. Under the plan, CPC would purchase 6 million tons of Alaska LNG per year once production begins, in line with a letter of intent signed last year, and participate in the project's development with an estimated investment of up to $4.4 billion, the ministry said.

"Specific investment arrangements, equity stakes and related terms will be determined through subsequent negotiations and commercial contract ⁠procedures," it ​said. The ministry did not say whether ⁠a binding sale-and-purchase agreement had been signed.

Taiwan officials said in February they would ramp up purchases of US natural gas to constitute about a third of the island's imported supply this year, and reduce ⁠purchases from other countries, part of an effort to reduce a yawning trade surplus that has angered Washington. PUSH TO SUPPLY ASIA

Last year, Taiwan Presidential Office Secretary-General Pan Men-an visited the site ​of the proposed LNG project in Alaska that the Trump administration has been pushing hard to allies in Asia as a supply option. So far, ⁠Alaska LNG has lined up agreements covering 13 million tons a year from buyers in Asia and French major TotalEnergies. It needs agreements for another 3 million tons and must turn them into binding deals ⁠in ​order to line up financing for the project.

The project would open direct access for US-made LNG to Asian markets including Taiwan without having to go through the Panama Canal or around the Horn of Africa, reducing transit time and costs. The project's developers aim to take a final investment decision on the 800-mile (1,287-km) pipeline in ⁠2026, followed by the export facility in 2027, with first LNG exports targeted for 2031.

Trump said last month that South Korea had agreed to invest in the $54 ⁠billion pipeline for the Alaska LNG project, ⁠but Seoul said it was not yet set in stone. Taiwan's economy ministry said on Wednesday that if the project proceeded on schedule, it could begin supplying additional natural gas to Taiwan as early as 2032.