Eskom and the Zululand Energy Terminal have signed a Heads of Agreement making Eskom the foundation customer at what would become South Africa’s first LNG import gateway, to be built at the Port of Richards Bay.

The terminal would receive and re-gasify shipped LNG to supply Eskom’s planned 3,000 MW gas-fired plant in the Richards Bay Industrial Development Zone. Zululand Energy Terminal is a joint venture between Vopak Terminal Durban, South African firm Reatile Group, and state-owned Transnet Pipelines, which secured a 25-year Terminal Operator Agreement with the Transnet National Ports Authority in February 2025. A final investment decision is expected this year on the project, estimated to require up to $1 billion in capital.

The project responds to South Africa’s updated Integrated Resource Plan, which allocates 6,000 MW to gas-fired generation by 2030, with 3,000 MW earmarked for Eskom and the rest to be procured through an independent power producer programme. Designed as an open-access facility, the terminal would allow other off-takers to contract capacity alongside Eskom, and ExxonMobil has separately signed an agreement to supply LNG through it. If it proceeds to FID, the terminal would mark a structural shift for a South African grid where coal still supplies more than half of all generation.

Source: prospect-intel.com