CPC Corp, Taiwan (CPC, 台灣中油) has begun planning crude oil and natural gas procurement for the fourth quarter amid continued tensions in the Middle East, chairman Fang Jeng-zen (方振仁) said yesterday.
The most critical period for Taiwan has passed, and the nation’s energy supply is expected to remain stable, Fang said at a meeting of the Legislative Yuan’s Economics Committee.
Taiwan has about 140 to 150 days of crude oil reserves and about 12 days of natural gas reserves, above the required safety level of 11 days, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) told the committee.
Photo: CNA
Procurement and scheduling for next month and July have largely been completed, with planning now focused on the fourth quarter, Kung said.
While the Strait of Hormuz has not fully reopened, major oil-producing countries, including Saudi Arabia and the United Arab Emirates, have found alternatives, such as transporting crude through pipelines to Red Sea ports or conducting ship-to-ship transfers outside the strait, Fang said.
Even so, crude oil exports from the Middle East have declined by about 40 percent compared with prewar levels, he said.
The impact on Taiwan remains relatively limited, as the nation’s main source of crude imports is the US, he added.
Tehran closed the Strait of Hormuz after the US and Israel attacked Iran on Feb. 28.
Some countries implemented fuel restrictions to mitigate oil supply shortages, but Taiwan has not seen any direct impacts, Fang said.
Meanwhile, shipments under CPC’s 25-year liquefied natural gas (LNG) supply agreement with Texas-based Cheniere Energy Inc, signed in February, are to begin next month.
LNG imports from the US account for about 10 percent of Taiwan’s total imports, and the government aims to raise the share to 25 percent by 2029 to reduce supply concentration risks and bolster supply stability, Kung said.
About 30 percent of Taiwan’s natural gas imports come from Qatar, he said.
As CPC has been absorbing rising costs for gasoline, diesel and natural gas to help stabilize consumer prices, it has come under heavy financial pressure, Kung said.
The Executive Yuan has proposed three measures to assist the company: special loans, subsidies and capital injections, he said.
The special loan program has already been completed, while subsidy plans are being compiled by the Directorate-General of Budget, Accounting and Statistics, he said.
The government is also planning a NT$350 billion (US$11.14 billion) capital injection into CPC over the next four years, with about NT$170 billion expected to be budgeted next year, Kung said.
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