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The firms revealed the signing of the agreement in a joint statement on Friday, establishing the framework for a long-term strategic partnership to support South Africa’s gas-to-power program.
Moreover, Eskom will assume foundation customer status at the proposed Zululand Energy Terminal that will provide open access to LNG import, storage, and regasification infrastructure, underpinning Eskom’s planned 3 000 MW gas-to-power program, the statement said.
“Both Eskom and Zululand Energy Terminal reaffirm their commitment to progressing the necessary regulatory approvals, long-term commercial contracting approach and structuring, and infrastructure development required to bring the project to fruition,” the statement said.
This partnership represents a “significant step” in advancing South Africa’s gas infrastructure ecosystem and supports national efforts to diversify energy supply, strengthen energy security, and enable economic growth, the partners said.
Eskom’s Richards Bay 3000 MW gas-to-power project is to be constructed and operated in the Richards Bay Industrial Development Zone (RBIDZ), in KwaZulu-Natal.
The project includes the import and consumption of regasified LNG as the primary fuel source.
Moreover, the lifecycle of the power plant is expected to be 25 years and the power plant is planned to operate primarily as a mid-merit plant.
The project will be developed through a private sector participation (PSP) model, leveraging strategic partners, project finance, and long-term power offtake arrangements, while the downstream power plant represents a large-scale capital investment, attracting international capital and accelerating industrial development within Richards Bay, the statement said.
LNG terminal
In February 2025, South Africa’s Transnet National Ports Authority signed a 25-year terminal operator agreement with the joint venture consisting of Vopak and Transnet Pipelines for South Africa’s first LNG import terminal.
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 LNG import project via its 70 percent-owned joint venture, Vopak Terminal Durban.
The partners plan to develop the project in two phases.
According to ZET, 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 3 mtpa, or about 400 mmscfd, and optional truck loading facilities.
Vopak and Transnet Pipelines plan to take a final investment decision on this phase in 2028.
The second phase includes an onshore LNG tank with a capacity of up to 220,000 cbm, potentialy replacing the FSU, and additional regasification capacity, increasing the total to 4.5 mtpa.
In March this year, ZET announced it would issue a request for expressions of interest to gauge EPC contractors’ interest and capabilities in participating in the project’s preparation and execution.
“The selection of the EPC contractor(s) will be conducted through a phased approach commencing with this request for expression of interest (EOI), followed by a request for information (RFI), and progressing to a request for quotation (RFQ),” the JV said.