Huang Guochang blasted the black box of Alaska LNG investment. Gong Mingxin asked: Can business negotiations be made public with a microphone?

Minister of Economic Affairs Gong Mingxin. (Photo by reporter Lin Jinghua, file photo)

[Reporter Lin Jinghua/Taipei Report] U.S. President Trump recently stated that he has obtained Taiwan’s commitment to purchase Alaskan liquefied natural gas (LNG) worth US$70 billion to US$80 billion, and Taiwan has also agreed to invest US$4.4 billion in equity investment. Minister of Economic Affairs Gong Ming-xin said today (15th) that the overall order will be "purchase first, then invest", hoping that through long-term natural gas purchase contracts, both energy supply resilience and balancing the trade surplus between Taiwan and the United States will be taken into account. As for the shareholding structure and investment conditions, China Petroleum Corporation's professional negotiations will be respected, and the relevant investment amount will not be paid in one go, but will be arranged in installments depending on the investment structure and schedule. When People's Party Chairman Huang Guochang questioned the black box of relevant details, Gong Mingxin asked if business negotiations should use a microphone to disclose the progress.

Gong Mingxin pointed out that Taiwan will add 25 large-scale natural gas units by 2035, and natural gas will still be an important source of energy. Taking into account the rising risks of the situation in the Middle East, Taiwan is gradually adjusting the source of natural gas imports, reducing the proportion of supply from the Middle East, and shifting part of its purchases to the United States. The proportion of natural gas purchased by Taiwan from the United States last year was about 10%. This year it has increased to more than 20% and will continue to increase in the future. Taiwan hopes to obtain more advantageous prices than the spot market through long-term contracts and reduce the risks caused by fluctuations in international energy prices. The current spot market price is relatively high, and long-term contracts with good conditions will be more secure for Taiwan's future natural gas supply.

He also pointed out that Alaska has transportation advantages in its geographical location. Natural gas carriers can reach Taiwan in about 10 days. The voyage is relatively short, which helps improve the resilience of energy supply. In addition to energy security, balancing trade between Taiwan and the United States is also an important consideration. Gong Mingxin said that in the first nine months of this year, Taiwan's trade surplus with the United States exceeded US$150 billion. Increasing energy purchases from the United States will have a positive effect on narrowing the trade imbalance between Taiwan and the United States. According to current plans, Taiwan's proportion of natural gas purchased from the United States is expected to increase to approximately 25% by 2029; if Alaska natural gas begins to be supplied in 2032, the relevant proportion is expected to increase to 30% or more.

In response to the US$4.4 billion investment that is of concern to the outside world, Gong Mingxin said that investment will be the second stage after procurement. Due to Taiwan's large procurement volume, it hopes to further participate in related investments, but the actual degree of participation, investment amount and conditions still need to be determined in subsequent negotiations. He emphasized that the Ministry of Economic Affairs' requirement for state-owned enterprises is to increase the source of natural gas and supply resilience. As for the actual contract conditions, the Ministry of Economic Affairs has not given guidance to CNPC or intervened in negotiations. In the end, the signed contract will prevail.

Regarding the opposition party's concern about how to prepare the investment budget, Gong Mingxin said that further planning of funding sources must be based on the investment structure, negotiation results and implementation schedule. In the future, funds may be raised through capital increase, surplus transfer to capital increase, or loans. Investment cannot be paid in one lump sum and must be paid in installments.

In response to Huang Guochang's question, the relevant investment details have moved from a black box to a black hand, and whether future reviews may also be manipulated. In this regard, Gong Mingxin said that he did not understand the so-called "black box" concept, and asked whether business negotiations should disclose the current negotiation progress through a microphone. He was quite sure of the performance of the CNPC negotiating team and said that the current negotiated price was quite good, but due to the commercial confidentiality of both parties, the specific conditions could not be disclosed to the outside world.