Vopak, Transnet working on capacity deals for South African LNG terminal

In January 2024, South Africa’s Transnet National Ports Authority appointed the two firms to build the import facility at the Port of Richards Bay.

Specifically, the consortium was appointed to design, develop, construct, finance, operate, and maintain the LNG terminal in the South Dunes precinct for a period of 25 years. 

Both TNPA, which is developing an LNG import terminal in the Port of Ngqura, and Transnet Pipeline are part of the South African rail, port, and pipeline company Transnet.

Vopak is developing the project via its 70 percent owned joint venture Vopak Terminal Durban.

In March, Vopak Terminal Durban and Transnet Pipelines invited parties interested in booking capacity at the LNG import terminal, named Zululand Energy Terminal, to submit their expression of interest.

After that, Zululand Energy Terminal formally launched the request for proposal (RFP) in September.

The deadline to submit the RFP response was initially October 18, but the JV extended it for an additional 10 days due to requests from firms.

Following the completion of the RFP, Zululand Energy Terminal evaluated the proposals and notified the shortlisted applicants.

“The joint venture is currently in the process of negotiating a heads of agreement (HoA) with shortlisted parties,” a spokesperson for Zululand Energy Terminal told LNG Prime on Thursday.

The spokesperson did not provide further information.

Vopak and its partner Transnet Pipelines previously picked UK-based engineer Wood to undertake the pre-FEED phase of the project, which is “pivotal” for the detailed planning and execution of the LNG project.

In addition to this contract, the partners also selected Standard Bank as the LNG project’s financial advisor.

First phase in 2028

Vopak and Transnet Pipelines plan to develop the project in two phases.

According to Zululand Energy Terminal’s website, the first phase includes a floating storage unit (FSU) of at least 170,000 cbm capacity and an onshore regasification system with an indicative capacity of 2 mtpa, or about 400 mmscfd.

Vopak and Transnet Pipelines target the commercial operations date (COD) for this phase in 2028.

The second phase includes an onshore LNG tank with an indicative capacity of 220,000 cbm.

The onshore tank will potentially replace the FSU and provide additional regas capacity to increase the total capacity up to 5 mtpa, or about 600 mmscfd.

This phase could reach COD as early as Q4 2029.

South Africa currently has no LNG import facilities.

Last year, South Africa’s state power company Eskom and petrochemicals firm Sasol joined forces to explore potential future LNG requirements in South Africa.

“The collaboration aims to determine the potential volumes that South Africa requires to establish a viable LNG import market along with the enabling infrastructure, and will be facilitated by government-to-government relations where necessary,” the two firms said.

This initiative focuses on using gas for power generation to provide essential base load electricity, as the country’s gas supplies decline.

South Africa’s Minister of Electricity and Energy, Kgosientsho Ramokgopa said at the time that Qatar is a top candidate from which South Africa could buy LNG.