Taiwan to reduce imports of Russian LNG

In Taiwan, the island’s main Russian LNG imports come from a five-year sale and purchase agreement between state-owned oil company CPC Corp. and Sakhalin Energy Investment Co.

But Taiwan is expected to reduce its LNG imports from Russia. Notably since this LNG purchase contract, from the Sakhalin LNG project, expires in March. In addition, other suppliers, such as major oil companies, are gradually withdrawing from the Russian oil and gas business.

In 2021, Russia is the third largest supplier of LNG to Taiwan, with about 1.89 million tons of LNG. This represents only 9.7% of its total imports.

On the other hand, Taiwan’s LNG imports from Russia plunged by 73.3%. Conversely, its LNG imports from the U.S. jumped 137.3 percent, according to the latest data released on March 7.

A very diversified supply :

Approximately 70% of Taiwan’s LNG supply is covered by long-term contracts. It has diversified its LNG sources to 14 countries, with Australia and Qatar being the main suppliers.

These account for 32.2% and 24.5% of total LNG imports, respectively, Taiwan’s Ministry of Economic Affairs said on February 25.

To fill the gap following the expiration of the supply contract, Taiwan has prepared alternative sources of LNG. The island should therefore not be impacted by the conflict between Russia and Ukraine.

Taiwan also imports spot LNG from Russia’s Yamal LNG project, supplied by Shell and BP with whom it has other supply contracts. Asian importers have asked suppliers to avoid designating Russian-origin LNG in their portfolios to meet their supply obligations, market sources said.

Taiwan member of the “unfriendly” list made by Moscow:

Taiwan joined the international sanctions against Russia on February 25, following the invasion of Ukraine.

The Russian government – which on March 7 released a list of 48 countries and territories deemed unfriendly by Moscow for joining international sanctions against Russia – included Taiwan along with the U.S. and Canada, EU states, the U.K., Japan, South Korea, Australia and Singapore, according to Russian state media.

Taiwan’s inclusion in this list has little effect on the island. Russia is not the main supplier of industrial materials to Taiwan, which has diversified its sources of oil and natural gas, said Ou Jiangan, spokesman for Taiwan’s Ministry of Foreign Affairs.

The diversification of the island’s supply ensures a certain independence from Russia.

Taiwan has also diversified its coal imports into nine countries, with 79.1 percent of volumes coming from Australia and Indonesia, and only 14.7 percent from Russia, MOEA said.

The evolution of the conflict should therefore have little impact on Taiwan’s energy situation.