KEY POINTS
- ExxonMobil signed a preliminary LNG supply deal with Zululand Energy Terminal at Richards Bay on June 17.
- The deal supports South Africa’s pivot away from coal and feeds Eskom’s planned 3,000MW gas-to-power project.
- ExxonMobil targets over 40 million metric tonnes of annual LNG supply capacity globally by 2030.
South Africa has been trying to wean itself off coal for years. On Wednesday, a major piece of that plan snapped into place.
ExxonMobil signed a preliminary deal to supply liquefied natural gas to Zululand Energy Terminal, which will become South Africa’s first LNG import facility once built. The announcement was made jointly by both companies on June 17, 2026. Reuters had reported in March that ZET was seeking to finalize a supply arrangement with ExxonMobil, ending months of speculation about whether the deal would close.
The Zululand Energy Terminal is being built at Richards Bay port on South Africa’s KwaZulu-Natal coast. It is a joint venture between Royal Vopak, Transnet Pipelines and Reatile Group. The terminal will receive, store and regasify imported LNG before distributing it through South Africa’s existing pipeline network to industrial consumers and power generators.
Coal currently accounts for the bulk of South Africa’s electricity supply. The country has been looking for cleaner, more reliable alternatives as its aging coal fleet struggles to keep pace with demand. LNG has emerged as the central bridge fuel in that transition.
What the deal means for South Africa’s energy future
Oliver Naidu, director of ZET, was direct about the significance. ExxonMobil’s involvement reinforces Richards Bay’s strategic role as an LNG gateway and backs plans to build a competitive and sustainable gas market in South Africa, he said.
Earlier this month, state power utility Eskom signed a long-term LNG agreement with ZET to support a planned 3,000-megawatt gas-to-power plant project. With ExxonMobil now committed on the supply side, ZET has two anchor arrangements in place within weeks of each other. That combination of a utility offtaker and a global LNG supplier gives the project the commercial credibility it needs to move toward a final investment decision.
ExxonMobil’s global LNG ambitions
The deal fits a larger pattern. ExxonMobil has identified South Africa as a priority market and has set a target of growing its global LNG supply capacity to more than 40 million metric tonnes per annum by 2030.
Andrew Barry, chairman of ExxonMobil LNG Market Development Inc., said the agreement shows the company’s commitment to South Africa’s energy security. “This agreement reflects Exxon Mobil’s global LNG experience and our commitment to support South Africa’s energy security with reliable supply,” he said.
The ZET project will be developed in two phases. The first phase includes a floating storage unit with a capacity of between 135,000 and 174,000 cubic meters, onshore regasification equipment and a new pipeline connecting the terminal to the Lilly Pipeline via Empangeni. The connection will also serve customers in the Richards Bay Industrial Development Zone.
