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Last Updated: December 2016

Overview


Map of Taiwan
Map of Taiwan
  • Taiwan has very limited domestic energy resources and must rely on oil and coal imports to satisfy the majority of its energy demand. According to Taiwanese official statistics, oil, coal, and natural gas made up 48%, 29%, and 13% of Taiwan’s total primary energy consumption in 2015, respectively, while the remainder was mostly nuclear (7%) and smaller amounts of various renewable energy sources. Total energy import dependence was about 98%, according to the Taiwanese government.
  • Petroleum and other liquids

  • Taiwan has small deposits of proved oil reserves of approximately 2.4 million barrels as of January 2016, according to the Oil & Gas Journal. Taiwan produced an average of 28,000 barrels per day (b/d) of petroleum and other liquids in 2015, virtually all of which was refinery processing gains.
  • Taiwan consumed almost 1.1 million b/d of petroleum and other liquids in 2015. Taiwan has three refineries with a total crude distillation capacity just over 1 million b/d, which run solely on imported crude oil. Taiwan imported almost 86% of its crude oil from countries in the Persian Gulf and smaller portions from Angola and other countries in 2015.
  • Taiwan’s Chinese Petroleum Corporation (CPC) closed its 205,000 b/d-Kaohsiung refinery at the end of 2015. Taiwan’s refineries, which are all aging and prone to accidents, face competition from more complex refining facilities coming online in the region, particularly in China. The CPC Corporation has plans to expand their net refining capacity by 47,000 b/d at the Dalin refinery by late 2017. The refinery complex additions include replacing old crude distillation capacity and installing a condensate splitter. Taiwan also trades refined products, exporting mostly gasoline and middle distillates to Asia, while importing naphtha and liquefied petroleum gas to feed its refinery and petrochemical industry.
  • Taiwan’s CPC and China’s state-owned China National Offshore Oil Corporation (CNOOC) are working together to explore for oil and natural gas in the Strait of Taiwan. The national oil companies (NOCs) renewed their production sharing contract in December 2014 for another two years. CPC and CNOOC experienced disappointing results with exploration in shallow water areas and initially in deepwater areas of the Strait of Taiwan. Prospects changed when the two NOCs found encouraging results from the middle portion of the Taichao Block. Further exploration is likely to hinge on the priorities both companies place on upstream investment and may face challenges from the low oil price environment.
  • CPC has increased involvement in overseas exploration as a result of terrestrial oil and gas fields in Taiwan expected to be depleted over the next decade. As of May 2016, CPC was involved in joint exploration of twenty-four fields in eight countries, which fifteen of the fields were producing oil and natural gas.
  • Taiwan and China claim sovereignty over the same territory in the South China Sea (SCS), including the Spratly Islands, Pratas Island, Paracel Islands, and the Scarborough Reef, using the historic “nine-dash line” established by Taiwan’s Kuomintang government in 1947. However, since 2014, Taiwan has argued that its maritime claims are based on land masses and that the United Nations’ maritime laws should apply. In 2015, Taiwan proposed the South China Sea Peace Initiative to promote cooperation and joint development by all countries surrounding the SCS. Taiwan has refrained from aggressive tactics in laying their claims to resources in neighboring seas and instead is conducting joint exploration and development with Japan in the East China Sea.
  • Taiwan rejected the UN’s ruling on the SCS arbitration case between China and the Philippines in July 2016. This case dismissed both China’s claim of the SCS within the nine-dash line and Taiwan’s claim that one of its land masses, Itu Aba, is an island eligible for extended maritime zone status under the UN law of the seas.
  • Natural gas

  • Taiwan produces a small amount of natural gas and imports nearly all of the natural gas it consumes (98%) in the form of liquefied natural gas (LNG). Taiwan imported more than 700 billion cubic feet (Bcf/y) of LNG in 2015, making it the world’s fifth-largest LNG importer, according to the International Gas Union.
  • Taiwan’s key LNG suppliers are Qatar, Malaysia, and Indonesia, which accounted for 80% of gas imports in 2015, mostly sold through long-term contracts. China Petroleum Corporation (CPC), which is the only company that imports LNG for Taiwan, is set to continue diversifying gas supply within the next few years after the company signed long-term supply contracts with capacity owners of liquefaction projects in Australia, the United States, and Papua New Guinea.
  • Taiwan’s two existing regasification terminals, located in the central and southern parts of the island, have a capacity of 620 Bcf/y, with nearly 100 Bcf/y of expansion capacity under construction at the Taichung LNG terminal. This expansion is scheduled for completion by the end of 2018. CPC and Taipower, Taiwan’s state-owned petroleum and natural gas company power utility, respectively, are planning to construct a third terminal to serve the northern region near Taipei, which is planned to be completed by the end of 2025.
  • Electricity

  • Taiwan’s gross electricity generation, mostly fueled by fossil energy, has grown by 14% in the past decade from 227 terawatthours (Twh) in 2005 to more than 258 Twh in 2015, according to Taiwan’s Bureau of Energy. Coal (45% share), natural gas (31% share), and nuclear power (14% share) make up the bulk of the island’s electricity generation portfolio.
  • Taiwan’s electricity policy is focusing on replacing older fossil fuel units with more efficient power plants and increasing its installed capacity and generation from renewable sources to diversify fuel sources. As a result, Taiwan passed the Renewable Energy Development Act in 2009 and a system for feed-in tariffs for solar and wind power, both which promote installation of electric generation capacity that is fueled by renewable energy sources.
  • Taiwan consumed about 68 million short tons of coal in 2015, all of which was imported. Coal consumption steadily increased overall since the 1990s and slowed after 2007 as a result of natural gas and renewables substituting some coal supply in the power sector.
  • Taiwan currently has three nuclear plants with about 5.1 gigwatts (GW) of capacity in operation, according to Taiwan’s Bureau of Energy. The island’s three existing plants, Chinashan, Kuosheng, and Maanshan, are reaching retirement age of 40 years and slated to be decommissioned starting in 2018 and ending in 2025.
  • Although construction of Taiwan’s fourth nuclear facility, with a capacity of 2.6 GW, was nearly complete, public protests over safety concerns suspended construction of the facility in early 2014. Japan’s Fukushima disaster in 2011 has tempered public sentiment towards nuclear power in Taiwan. The plant was mothballed after finishing safety inspections in 2015. A public referendum to determine the facility’s fate has not been scheduled. The Taiwanese government is discussing various plans for this plant including converting it to accept other fuels like natural gas or coal. Furthermore, the government has been seeking more natural gas and renewable sources to feed power supply and replace any loss of nuclear power generation.