Taiwan Power Co (Taipower,
The state-run utility may boost natural gas demand to 4.42 million metric tonnes next year, from an estimated 3.9 million this year, spokesman Lee Chuan-lai (李傳來) said last Friday. Any shortfall will be met by diesel at the NT$116.7 billion (US$3.6 billion) Tatan power plant in northern Taiwan, which started operations in June, a month earlier than planned.
The utility may contribute to a shortage of liquefied natural gas from monopoly importer Chinese Petroleum Corp (CPC,
Taiwan, South Korea and Japan are switching plants to natural gas after oil prices more than tripled since 2001, outpacing the doubling in benchmark LNG costs.
"It's not easy to find gas," Lee said in a phone interview.
"The amount CPC has secured for us is far less than what we need," forcing Taipower to consider oil as an alternative, he said.
The Taipei-based electricity generator accounts for more than half of natural gas demand of Taiwan, Asia's third-biggest LNG buyer.
The Tatan power plant will be the country's second-largest, accounting for almost a 10th of Taiwan's generating capacity by 2010. It first burned diesel and began using natural gas in August when CPC completed a pipeline linking the facility with a LNG terminal in the south, Lee said.
The Tatan plant will reach its full capacity of 4,384 megawatts by 2010, Lee said. It will have two generators that can burn natural gas or diesel and four using only gas.
"Demand from Tatan has come earlier than expected, and this is creating pressure on supply," said Chen Shih-hau (
The government owns 97 percent of the utility, which generates about 75 percent of the electricity the nation uses and monopolizes transmission in Taiwan.
Taipower decided to switch to natural gas at Tatan earlier than the original plan of 2008 to reduce the cost of burning diesel, vice president Lee Jiin-tyan (李錦田) said last year.
LNG, which accounts for more than 90 percent of Taiwan's natural gas needs, is gas that has been cooled for transport by ship. Import terminals return the LNG to gas form so that it can be sent through pipelines to customers such as factories, power stations and households.
Taipower forecast's Tatan's gas requirement at 530,000 metric tonnes next year and 690,000 in 2008, ramping up to 1.68 million in 2011, from an estimated 130,000 this year, Lee said.
"We'll have to see what we can do about the increase in demand from Taipower" next year, Jane Liao, general manager of CPC's LNG purchase unit, said last Thursday.
Taiwan's largest power station in Taichung runs on coal, the fuel used for 46 percent of the nation's power needs in October, the Taipower Web site says. Natural gas accounted for 21 percent of output, nuclear reactors about 19 percent, oil 6.1 percent and hydropower 3.6 percent.
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