Taiwan’s state-held oil and gas company CPC Corporation on Thursday signed a letter of intent to invest in the Alaska LNG export project and buy LNG from it, as part of a move to bolster its gas supply and energy security.

The preliminary deal was signed between CPC and the state-run firm Alaska Gasline Development Corporation (AGDC) in the presence of Alaska Governor Mike Dunleavy, the Taiwanese Ministry of Economic Affairs said in a statement.

Officials from Alaska are currently touring several countries in Asia, including Japan and South Korea, in search of potential Asian investors in the planned $44-billion Alaska LNG project, which is strongly supported by the Trump Administration.

AGDC seeks to advance the Alaska LNG project which is designed to deliver North Slope natural gas to Alaskans and export LNG to U.S. allies across the Pacific.

If built, Alaska LNG would be Taiwan’s closest LNG supply source among all U.S. LNG export facilities. The fuel from Alaska LNG wouldn’t need to pass through the Panama Canal, which will effectively shorten shipping time, reduce voyage risks, and improve the reliability of Taiwan’s natural gas supply, the economy ministry said.

With LNG from Alaska, Taiwan could diversify its LNG supply, “ensuring stable energy prices and consistent supply from a friendly neighbor for many decades to come,” Alaska Governor Dunleavy said in Taipei, as carried by Reuters.

The U.S. is a staunch supporter of democratically-governed Taiwan, which China claims as its own island.

With the strong backing of the Trump Administration, Alaska officials are pitching investments in the Alaska LNG project to allies across northeast Asia.

In recent weeks, the U.S. Administration has been pressing Japan and South Korea to buy more LNG as a way to reduce America’s trade deficit with its Asian allies.

Despite signals that Asian partners are willing to discuss potential participation in Alaska LNG, Japanese companies appear to be concerned that the costs may be too high considering the cold weather in Alaska and the scale of the pipelines needed to bring the project on stream.

By Charles Kennedy for Oilprice.com

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