Taiwan suspends Papua New Guinea LNG purchases amid diplomatic dispute

Taiwan has suspended some liquefied natural gas purchases from Papua New Guinea in response to an escalating diplomatic dispute over its representative office in Port Moresby. The move affects spot-market imports and comes after Papua New Guinea said it would shut Taiwan's de-facto embassy. Taiwan has not said it will end its long-term gas contract with the Pacific nation.

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The dispute intensified after Papua New Guinea's foreign minister, Justin Tkatchenko, announced earlier this month that the office would be closed in recognition of the country's One China policy. Taiwan rejected the decision as unilateral and said its officials would remain at their post. Taipei also said it would revise its gas contracts with Papua New Guinea, including a long-term agreement running until 2030 for 1.2 million tonnes of LNG a year.

A senior official from Taiwan's foreign ministry later said the suspension applied to separate spot purchases on the open market, amounting to about 500,000 tonnes every six months. The value of the suspended imports has been estimated at about $800 million at current market rates, although analysts say that figure could rise because of volatility in gas prices. Taiwan's officials have remained in Papua New Guinea, and local authorities have not moved to force them out.

The dispute matters because it links diplomatic recognition to energy trade, a pattern that can have wider implications for Taiwan's informal international network. China has publicly welcomed Papua New Guinea's decision, with Foreign Minister Wang Yi saying it could serve as a model for other countries. That has added to concern in Taipei that other governments could be encouraged to follow a similar path, further narrowing Taiwan's diplomatic space.

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Papua New Guinea's move is also significant because it comes in the context of broader competition over influence in the Pacific. Taiwan has long relied on representative offices rather than formal embassies in many places, and those arrangements can be vulnerable when governments shift their stance on Beijing. The current dispute shows how quickly a political decision can spill into commercial ties, even where long-term contracts remain in place.

What remains unclear is whether the suspension of spot purchases will lead to further changes in Taiwan's gas buying or in Papua New Guinea's handling of the office closure. It is also not clear how quickly Papua New Guinea could replace any lost trade, although one analyst said it was likely to find other buyers. The next developments to watch are whether the representative office is actually closed, whether Taiwan alters its long-term contract, and whether the dispute prompts any wider diplomatic fallout.

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