Taiwan halts spot LNG purchases from Papua New Guinea, removing about $800 million of demand from the spot market

Taiwan has suspended purchases of about 500,000 metric tons of LNG from Papua New Guinea every six months, removing roughly $800 million of demand from the spot market. The decision, reported on Wednesday, 29 July 2026, followed Port Moresby's order to close Taipei's representative office.

The long-term contract is untouched: Taiwan will continue importing 1.2 million metric tons of Papua New Guinea LNG annually through 2030, an agreement that accounts for roughly one-third of that country's LNG exports. Papua New Guinea announced earlier this month that it would close Taiwan's trade office in recognition of the One China policy, and Chinese Foreign Minister Wang Yi welcomed the decision. The US State Department said it was "deeply concerned" by the move, Reuters reported in mid-July.

Taiwan imports about 95 percent of its energy, and natural gas generates nearly half of the island's electricity following the retirement of its final nuclear reactor, which is why Taipei withdrew from spot buying, which provides flexibility, while preserving its baseload contract. LNG accounts for roughly half of Papua New Guinea's export earnings, although only about 8 percent of Taiwan's total LNG imports come from there. Analysts expect producers to redirect the freed cargoes to other Asian buyers with limited disruption, in a market facing higher prices and tighter supply after the Iran war and continuing security risks around the Strait of Hormuz.