Taiwan's CPC Corp to Ramp Up US LNG Imports to Balance Trade

Strategic Move to Diversify Energy Sources and Address Trade Imbalance with the US

In a move to address the trade balance and diversify its energy sources, Taiwan's state-owned oil refiner, CPC Corp (台灣中油), is set to significantly increase its imports of US energy products, including liquefied natural gas (LNG) and crude oil.

This strategic decision comes in response to US President Donald Trump's tariff policies and aligns with President William Lai (賴清德)'s commitment to expanding purchases of US goods. The government aims to narrow the trade balance by boosting imports of various US products, including agricultural, industrial, and energy resources.

The Ministry of Economic Affairs has set an ambitious goal: to have US-sourced LNG account for 30% of Taiwan’s total LNG imports.

Last year, US LNG comprised 10% of CPC’s imports, sourced from 14 different countries. CPC sources indicate this target can be achieved by increasing existing LNG imports from the US and seeking new supply channels, such as LNG from Alaska.

The company has already signed a term sheet with select US firms, demonstrating its intent to import LNG from Alaska. Although the project is anticipated to take five to seven years to become operational, this signifies a long-term commitment to the US market.

CPC has also confirmed that it will substantially increase LNG imports from the US over the next four years. Moreover, the company plans to increase its purchases of US crude oil to secure a stable energy supply for the nation.

CPC primarily imports sweet crude oil, characterized by its lower sulfur content, from both the US and African countries. While sweet crude is more expensive, it offers a more environmentally friendly alternative. The company also imports sour crude, with a higher sulfur content, primarily from the Middle East.

Despite considering a potential reduction in US sweet crude imports due to declining domestic demand for gasoline and diesel, CPC is now reevaluating that decision. This reassessment reflects the government’s emphasis on achieving net-zero emissions and broader energy diversification strategies.

Over the past three years, US-sourced crude has already increased from 44% to 60% of CPC's total imports. This rise was partially influenced by a fire at the company’s Dalin refinery’s heavy oil desulfurization unit on Oct. 27, 2022. The Dalin facility has since undergone repairs and is expected to resume operations soon.