ExxonMobil South Africa LNG, a subsidiary of US-based energy heavyweight ExxonMobil, has signed a master agreement (HoA) with a strategic partnership between Vopak Terminal Durban and Transnet Pipelines to advance the development of a liquefied natural gas (LNG) import terminal at the Port of Richards Bay, South Africa.
ExxonMobil’s HoA with Zululand Power Station (ZET)The project, a joint venture between Vopak and Transnet, was interpreted as a signal of international market interest in supplying LNG to South Africa, and to support the continued development of the infrastructure needed to create a new gas import platform for the country.
Oliver NaiduZET Director commented: “This agreement represents more than just a commercial milestone; it is a strong vote of confidence in the Zululand Power Terminal and the future of LNG in South Africa. The participation of a global energy leader like ExxonMobil reinforces the strategic importance of Richards Bay as an entry point for LNG and supports our vision to develop the infrastructure needed to open a competitive and sustainable gas market.”
The new LNG terminal is expected to position Richards Bay as a major entry point for imported LNG and support the country’s transition towards a safer and more diversified energy mix. South Africa is expected to face a significant gas supply shortage by 2030, with current supplies from Bande Timan fields in Mozambique declining.
This gas dredging is said to pose a risk to power generation, industrial activity, employment and economic growth, reinforcing the need for new gas supply options and enabling infrastructure. The Zululand Power Terminal is expected to be the first LNG import facility in South Africa, enabling the import, storage, reconversion and distribution of LNG to both power generation and industrial users.
Michelle PhillipsTransnet Group CEO said: “Transnet remains committed to supporting strategic infrastructure that enhances South Africa’s long-term energy security and industrial competitiveness. Through the Transnet Pipelines partnership at the Zululand Energy Terminal, we continue to support the development of critical LNG import infrastructure in Richards Bay.”
Once operational, the LNG terminal is expected to enhance South Africa’s energy security and support the development of the region Gas market in the countryEnabling industrial growth and competitiveness, and facilitating a balanced energy transition alongside renewable energy.
Andrew BarryThe head of the LNG market development department at ExxonMobil confirmed: “This agreement reflects ExxonMobil’s global experience in LNG and our commitment to supporting South Africa’s energy security with reliable supplies. As LNG markets continue to expand globally, we see a strong opportunity to help meet the growing demand for secure energy and we look forward to working with ZET to advance this opportunity.”
Based on the plans revealed previously, the project will be implemented in two phases. The first phase entails the development of a floating storage unit with a capacity of between 135,000 and 174,000 cubic metres, onshore regasification infrastructure capable of approximately 400 million cubic feet per day, and optional truck loading facilities. A new pipeline will connect the station to the Lily Pipeline via Empangeni, with a connecting point for customers of the Richards Bay Industrial Development Zone.
On the other hand, the second phase covers the construction of an onshore storage tank with a capacity of up to 220,000 cubic metres, replacing a fossil fuel storage unit to increase transmission capacity to approximately 600 million cubic feet per day, and accommodate gas-to-energy projects planned in Richards Bay and future gas users nationwide.
Martin SmitsThe president of ZET said: “Signing this cooperation agreement with ExxonMobil strengthens the base for developing a terminal with one of the world’s largest energy companies. Through the terminal, South Africa ensures access to the global LNG market to enhance its energy mix through access to reliable and affordable supplies.”
Under a 25-year concession, ZET intends to design, build and operate critical gas infrastructure that provides a reliable supply of LNG to industry and power generation. The project is expected to enhance energy security, attract investment, create new economic opportunities throughout KwaZulu-Natal, and support South Africa’s evolving energy landscape.
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