Taiwan’s Alaska LNG plan could boost energy security but carries risks, experts say

Taipei has confirmed US President Donald Trump’s announcement outlining Taiwan’s intent to procure Alaskan liquefied natural gas (LNG) and participate in developing the project, though formal commercial contracts have yet to be finalized. While Taiwanese academics acknowledge the proposed procurement could bolster Taiwan's strategic energy security, they note that the capital-intensive megaproject carries substantial logistical, financial, and regulatory uncertainties.

LNG purchases and investment

Trump announced on Oct. 13 that Taiwan had committed to purchasing 6 million metric tons of Alaskan LNG annually and would contribute US$4.4 billion to the development of US natural-gas projects.

Taiwan’s Ministry of Economic Affairs (MOEA) confirmed the following day that it was planning to begin purchasing 6 million metric tons of Alaskan LNG each year in 2032 at the earliest, subject to the project progressing, and participate in project development, with an investment of up to US$4.4 billion.

Economics Minister Kung Ming-hsin (龔明鑫) said on Oct. 15 that Taiwan will offset a slight dip in the share of LNG imported from Qatar with increased US supplies, preparing for an anticipated surge in domestic natural gas demand as 25 new gas-fired generators come online by 2035.

On investment, Kung said Taiwan would first assess the project after sufficient gas supplies became available, describing the approach as “purchase first, invest later.”

Kung emphasized that stepping up US energy purchases could help redress Taiwan's swelling commercial imbalance with Washington, citing a massive $150 billion bilateral trade surplus accumulated over the first three quarters of the year.

During legislative questioning on Oct. 20, Kung clarified that while Alaskan LNG could backfill an anticipated drop in Middle Eastern supply contracts around 2031–2032, the proposal remains a non-binding expression of intent that incorporates lawmakers' reservations into active discussions.

Premier Cho Jung-tai (卓榮泰) said during the same session that future cooperation on the initiative remains conditional on protecting Taiwan’s national interests, ensuring energy security, and securing mutually beneficial terms that align with the island’s long-term development.

Key uncertainties remain

Tu Sheng-tsung (杜聖聰), chair of the Department of Radio and Television at Ming Chuan University, told TCN that the absence of a binding bilateral agreement leaves the Alaskan LNG venture in limbo, with the outcome of the Nov. 3 US midterm elections posing a decisive factor for its future viability.

Tu pointed out that while the ruling Democratic Progressive Party (DPP) government seeks to tie the proposed LNG initiative to broader US-Taiwan security ties, insufficient transparency in preparatory vetting and commercial terms could undermine projected returns or culminate in a failed venture.

LNG infrastructure demands extensive development cycles and massive capital commitments, posing long-term fiscal liabilities that could ultimately burden domestic taxpayers, Tu observed. 

While Washington would welcome Taiwanese capital to co-finance critical pipeline networks, Taipei must rigorously evaluate whether underwriting such frontier projects genuinely advances its own economic interests and delivers tangible returns, Tu said.

Implications for energy security

Sun Kuo-hsiang (孫國祥), a professor in the Department of International Affairs and Business at Nanhua University, told TCN that buying Alaskan LNG and investing in its development could bolster Taiwan’s energy security by creating a Pacific supply route that avoids high-risk maritime chokepoints. 

The purchases could also help reduce Taiwan’s trade surplus with the US and deepen the island’s economic ties with Washington’s Indo-Pacific strategy, he said.

Sun said the strategy would diversify Taiwan’s energy supply by establishing a direct North Pacific shipping route that avoids vulnerable waters such as the South China Sea, while reducing reliance on imports from the Middle East and Australia.

However, he said, changing the source and transit route of LNG would not resolve Taiwan’s underlying vulnerability: its limited domestic storage capacity and exposure to potential blockades of coastal ports.

Energy ties do not guarantee US security commitments

Tu cautioned against operating under the assumption that deepening energy partnerships will automatically yield expanded US security guarantees. 

Washington’s foremost strategic compass remains the defense of its own national security and core interests, he noted, warning that capital-intensive gas procurements or infrastructure outlays will not necessarily translate into upgraded defense commitments for Taiwan.

Tu pointed to US proposals to shift the focus of its defense posture farther back toward Guam and the Second Island Chain, saying they illustrate how Washington may adjust its security policy according to its own strategic interests.

Sun also said closer economic ties do not necessarily amount to a US security guarantee. Commercial energy investments could give Washington strong financial and geopolitical incentives to keep Taiwan’s sea lanes open, he said, but would not automatically bind the US to intervene militarily in a cross-strait crisis.

The project could tie Taiwan more closely to critical US supply chains, making a blockade of Taiwan a direct threat to American commercial interests, Sun said.

But any US military response would ultimately depend on its broader national security strategy, public opinion and defense policy under the Taiwan Relations Act, rather than on commercial contracts, he added.

Commercial risks

The proposed Alaskan gas venture presents an extraordinary risk profile for Taiwan's public coffers, with total capital expenditures estimated between $40 billion and $50 billion, according to Sun. 

In his assessment, navigating complex permafrost engineering, relentless legal battles over the 1,300-kilometer midstream pipeline, and a protracted deployment timeline into the next decade could turn the venture into an open-ended financial drain, severely constraining the capital allocation and liquidity reserves of CPC Corp., Taiwan.

Sun observed that while Taiwan currently maintains the leverage to negotiate milestone-based termination clauses, executing a contract would effectively eliminate its maneuverability, making any subsequent withdrawal politically punitive even if legally viable.

Delays or structural stalemates stemming from the venture's commercial viability could remain manageable if Taipei rechannels equivalent capital toward alternative long-term US LNG contracts or cross-border assets, Sun observed.

However, a unilateral retreat by Taiwan, Sun noted, would risk severe diplomatic friction, forfeiting hard-won political capital with Washington while exposing the island to heightened retaliatory trade and tariff pressures.