Taiwan, which has seen increased military exercises off its coast by Chinese forces this year, has just inked a major energy deal with a U.S. energy firm.
On Monday, Taiwan’s CPC Corp., a major LNG importer, announced a preliminary deal to buy liquefied natural gas (LNG) from U.S. based LNG producer Cheniere Energy for a period of 25 years. CPC signed a Heads of Agreement to purchase 2 million tonnes of LNG annually from the major gas exporter, which is gearing up to start exports from its second export plant at Corpus Christi, Texas.
LNG import needs
Taiwan is the fifth largest LNG importer in the world after Japan, China, South Korea and India. With scant hydrocarbon resources of its own, and with nuclear power needed for electricity generation falling out of favor with the Taiwanese populace, the island country will increasingly rely on both oil and gas imports to fuel its economy.
However, this presents several geopolitical complexities for the country of some 24 million people. Amid Chinese President Xi Jinping’s more muscular approach in the Asia Pacific region, including pressing against its neighbors in overlapping claims in the South China Sea, China’s stance toward Taiwan has also worsened, pitting Washington (which has a more than 50 year old mutual defense treaty with Taiwan) on a potential collision course with Beijing. China has vowed to bring Taiwan under is control, even at the threat of armed conflict.
In June, the Chinese navy brought even more pressure on Taiwan by conducting large scale naval drills every day for a week off the Taiwanese coast, according to Chinese media reports. Just two months earlier, the Chinese navy also conducted live fire drills off of Taiwan’s coast. It was the first naval exercise in the waters since September 2015, which occurred in the lead-up to the self-ruled island’s presidential election.
Taiwan Strait caught in geopolitical cross-hairs
Full article: Taiwan Doubles Down On U.S. LNG (OilPrice)