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South Africa is all set to develop its first liquefied natural gas (LNG) import terminal at the Port of Richards Bay. Zululand Energy Terminal, a joint venture between Vopak Terminal Durban and Transnet Pipelines (TPL), has officially signed a 25-year Terminal Operator Agreement (TOA) with Transnet National Ports Authority (TNPA).<\/p>\n
The agreement, signed on February 10, 2025, gives Zululand Energy Terminal the rights to construct, develop, finance, operate, and maintain the LNG import terminal in Richards Bay.<\/p>\n
This follows the Request for Proposal (RFP) award in January 2024 and marks the completion of detailed discussions between TNPA, the port authority, and Zululand Energy Terminal, the terminal operator.<\/p>\n
The LNG terminal will be developed in two phases:<\/p>\n
Phase 1 will involve setting up a Floating Storage Unit (FSU) with a capacity of 135,000\u2013174,000 cubic meters and onshore regasification facilities that can handle approximately 400 million standard cubic feet per day (mmscfd).<\/p>\n
A new pipeline connection will link the terminal to the Lilly Pipeline via Empangeni, providing an additional tie-in point for customers in the Richards Bay Industrial Development Zone (IDZ). The plan also includes optional truck-loading facilities for wider distribution.<\/p>\n
Phase 2 will replace the FSU with a permanent onshore storage tank of up to 220,000 cubic meters. This expansion will increase the gas send-out capacity to 600 mmscfd, supporting Gas-to-Power projects in Richards Bay and supplying industries nationwide.<\/p>\n
As South Africa faces declining gas supplies and prepares to shut down aging coal-fired power plants, the terminal will play a vital role in ensuring energy security, supporting industrial development, and expanding gas supply options for power generation and industries.<\/p>\n
Zululand Energy Terminal is already in discussions with potential customers as part of its capacity allocation process. A final investment decision (FID) is expected in 2026, which will depend on securing long-term commitments from buyers.<\/p>\n
A Vopak South Africa representative said that the project aligns with Vopak\u2019s strategy of expanding in industrial and gas terminals and providing sustainable energy solutions for the country.<\/p>\n
Alongside the LNG project, TNPA has also signed a 25-year concession agreement with FFS Tank Terminals for a liquid bulk terminal at Richards Bay\u2019s South Dunes precinct.<\/p>\n
The liquid bulk terminal will cater to the growing demand for bunker fuels, further enhancing maritime fuel services in the region.<\/p>\n
A Transnet official said that these projects are critical for modernising South Africa\u2019s port infrastructure and will help the country remain competitive in the global energy and shipping markets.<\/p>\n
Zululand Energy Terminal\u2019s Request for Proposal (RFP) process, which began on September 23, 2024, has already identified key stakeholders interested in the terminal\u2019s services.<\/p>\n
Negotiations are ongoing with a select group of customers to finalise agreements necessary for the 2026 investment decision.<\/p>\n