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Taiwan set to wind down Russian LNG imports as contract expiry nears


CPC-Sakhalin LNG supply deal expires in March 2022

Alternative LNG sources to fill the gap: ministry

Russia's 'unfriendly list' has no impact on LNG supply: ministry

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Taiwan is set to wind down its LNG imports from Russia as its contract for LNG purchases from the Sakhalin LNG project expires in March and other suppliers, such as oil majors, gradually pull back from trading Russian oil and gas.

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Russia was the third-largest LNG supplier to Taiwan, sending around 1.89 million mt of LNG in 2021 that accounted for 9.7% of its total LNG imports of 19.44 million mt, according to data from the Taiwan Bureau of Energy.

Taiwan's LNG imports from Russia plunged 73.3% month on month to 53,838 mt in January, while its LNG imports from the US surged 137.3% month on month to 172,490 mt, according to the latest data released March 7.

The island's main Russian LNG imports come from a five-year sale and purchase agreement between state petroleum company CPC Corp. and Sakhalin Energy Investment Co. for 0.75 million mt/year of LNG DES basis loaded at Prigorodnoye and supplied from 2017 to 2022. Gazprom, Shell, Mitsui, and Mitsubishi are the main partners in Sakhalin Energy.

Taiwan's LNG supply is about 70% covered by long-term contracts. It has diversified its LNG sources to 14 countries, with Australia and Qatar being the main suppliers accounting for 32.2% and 24.5% of total LNG imports, respectively, Taiwan Ministry of Economic Affairs said Feb. 25.

The Sakhalin Energy supply contract is due to expire in March, and Taiwan has prepared alternative LNG sources to fill the gap, so it is not expected to be affected by the Russia-Ukraine conflict, the ministry said.

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 been asking suppliers to avoid nominating Russian-origin LNG from their portfolio to fulfil supply obligations, market sources said.

Such requests, however, are subject to contractual conditions, as some buyers agree to volumes from a specific project and not the supplier's global portfolio. Shell and BP have said they intend to wind down involvement in Russian oil and gas over the long term, but this could take time.

Cypress-flagged LNG carrier Grand Elena is currently expected to load LNG at Sakhalin 2, and arrive at Taiwan's Yong An LNG terminal March 26, according to shipping data. CPC did not immediately respond to queries seeking comment on its Russian LNG volumes.

Russian sanctions

Taiwan joined international sanctions against Russia Feb. 25 following the invasion of Ukraine.

The Russian government -- which published a list of 48 countries and territories deemed unfriendly by Moscow March 7 because they joined international sanctions against Russia -- included Taiwan along with the US and Canada, the EU states, the UK, Japan, South Korea, Australia, and Singapore, according to the Russian state media.

Russia's inclusion of Taiwan in that list would have little effect on the island, as Russia is not the main supplier of industrial materials to Taiwan, which has diversified its oil and natural gas sources, Taiwan Foreign Ministry Spokesperson Ou Jiangan said in a press conference March 8.

Taiwan stopped importing crude oil from Russia in 2016, and diversified crude sources to 14 countries, with 74.25% of the volumes coming from the Middle East, 19.13% from the Americas (US) and 1.33% from West Africa (Angola), the MOEA said.

Taiwan has also diversified its coal imports to nine countries, with 79.1% of the volumes coming from Australia and Indonesia, and only 14.7% from Russia, the MOEA said, adding that the island has been moving toward reducing coal usage, therefore any effect of Russia cutting supply would be limited.

As of Feb. 25, Taiwan had 36 days of coal stock, 148 days of oil stock, including 75 days of crude stock from Taiwan CNPC, and 10 days of natural gas stock, all of which were higher than the standards set by the government, according to the MOEA.


Jan-Dec 2021
Jan-Dec 2020
United States
Papua New Guinea

Source: Taiwan Bureau of Energy