Taiwan wants more flexibility in liquefied natural gas (LNG) purchasing contracts to be able to better match supplies amid fluctuating demand, Minister of Economic Affairs Steve Chen (陳瑞隆) said yesterday.
Buyers want take-or-pay conditions in contracts to be eased and fewer restrictions on where liquefied natural gas cargoes can be delivered, Chen said at the South East Asia Australia Offshore Conference in Darwin, Australia.
"Removing this restriction would ease buyers' concerns over market uncertainties, allowing the diversion of surplus supplies to markets in need," Chen said.
Taiwan's demand for LNG is forecast to rise 5 percent to 8 million metric tonnes this year, increasing to 10.5 million tonnes in 2010 and 16 million tonnes in 2020.
LNG meets more than 90 percent of gas demand in Taiwan, Asia's third-largest buyer of the fuel.
"Introducing greater competition in the trade of LNG will help improve the long-term security of supply as well as create wider access to LNG sources," Chen said. "A key element to achieving these reforms would be providing LNG contracts with more flexibility."
Investment risks faced by sellers could be reduced by the use of forward contracts, futures and options, Chen said.
"These tools will be necessary to deepen the LNG market and contribute to its long-term success," he said.
Taiwan has inked four long-term agreements with Malaysia, Indonesia and Qatar. Chen said the country was keen to buy Australia LNG from Woodside's North West Shelf project. He did not elaborate.
In related news, state-run CPC Corp, Taiwan (
The price hike was attributed to LNG price increases in the international market, CPC said in a statement on its Web site.
The company said the cost of LNG imports stood at NT$12.80 per cubic meter last month, up from an average of NT$11.3 per cubic meter in the first four months of this year.
The new rates would affect all users including factories, power plants and city gas companies, the refiner said.
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