KEY POINTS
- Eskom signs agreement with Zululand Energy Terminal for LNG supply project
- Deal supports 3,000MW gas-to-power programme in South Africa
- Project aims to boost energy security and grid stability
South Africa’s power utility, Eskom, has signed a heads of agreement with Zululand Energy Terminal (ZET) to establish a long-term strategic partnership aimed at supporting the country’s gas-to-power programme and strengthening energy security.
The agreement sets out a framework for Eskom to take up “foundation customer” status at the planned LNG import terminal, which will provide infrastructure for the import, storage, and regasification of liquefied natural gas (LNG).
Under the agreement, Eskom will anchor demand at the Zululand Energy Terminal, helping to underpin the development of infrastructure needed to support its planned 3,000 megawatt gas-to-power project.
The terminal is expected to operate on an open-access model, allowing multiple users to benefit from its LNG import and processing capacity.
The partnership is designed to advance regulatory approvals, long-term commercial contracts, and infrastructure development required to bring the project into operation.
ZET Ownership and Project Structure
Zululand Energy Terminal is a joint venture involving Vopak Terminal Durban, Royal Vopak of the Netherlands, Reatile Group Proprietary Limited, and Transnet Pipelines, a division of Transnet SOC Ltd.
The project was awarded a concession by the Transnet National Ports Authority to develop, construct, operate, and maintain the LNG terminal.
It is seen as a key infrastructure component in South Africa’s emerging gas market and energy diversification strategy.
The LNG terminal and associated gas-to-power developments are expected to play a central role in improving grid stability and supporting renewable energy integration.
Officials say gas will serve as a transition fuel, providing reliable and dispatchable power to complement intermittent sources such as solar and wind.
The Richards Bay gas-to-power project, where Eskom plans to build its 3,000MW plant, is designated as a Strategic Integrated Project under national infrastructure planning frameworks.
The plant is expected to run on regasified LNG imported through the Zululand Energy Terminal and operate over a 25-year lifecycle as a mid-merit power facility. The project will be developed through a private sector participation model, leveraging long-term power purchase agreements, project finance, and strategic partnerships.
Authorities expect the development to attract significant international investment and stimulate industrial activity in the Richards Bay Industrial Development Zone.
Energy leaders say the initiative will help strengthen South Africa’s long-term energy security while supporting economic growth and industrial expansion. Eskom Group Chief Executive Dan Marokane described the agreement as a key step in securing reliable gas supply for the utility’s gas-to-power programme, noting its importance for grid stability and renewable energy integration.
Zululand Energy Terminal Director Oliver Naidu also said the agreement strengthens the commercial foundation of the project and reflects growing confidence in LNG as a driver of energy security and industrial development.
Both parties say they will continue working toward a final terminal use agreement, financial close, and eventual construction of South Africa’s first LNG import terminal.
