- Eskom signs Heads of Agreement with Zululand Energy Terminal to support its planned 3 GW gas to power programme.
- Partnership underpins development of South Africa’s first LNG import terminal and supports the country’s energy transition strategy.
- Project aligns with IRP 2025, which targets 6 GW of gas fired generation capacity by 2030.
Eskom and Zululand Energy Terminal (ZET) have signed a Heads of Agreement establishing a framework for a long term strategic partnership aimed at advancing South Africa’s gas to power ambitions and strengthening the country’s energy security.
Under the agreement, Eskom will become a foundation customer of the proposed Zululand Energy Terminal in Richards Bay, securing access to liquefied natural gas import, storage and regasification infrastructure required to support its planned 3 GW gas to power programme.
The parties said the agreement marks an important milestone in the development of South Africa’s gas infrastructure ecosystem and reinforces efforts to diversify the country’s energy mix, improve grid reliability and support economic growth.
ZET is a joint venture between Vopak Terminal Durban, owned by Royal Vopak, Reatile Group Proprietary Limited and Transnet Pipelines. The consortium was awarded a concession by Transnet National Ports Authority to develop, construct, operate and maintain the LNG terminal.
The project has received backing from the Ministry of Electricity and Energy, the Ministry of Transport and Transnet. It is expected to play a central role in enabling gas fired generation capacity that can provide flexible and dispatchable power to complement growing renewable energy capacity on the national grid.
Eskom’s planned 3 GW Richards Bay Gas to Power Project will be located within the Richards Bay Industrial Development Zone in KwaZulu Natal. The facility is expected to operate for 25 years, using regasified LNG as its primary fuel source and serving mainly as a mid merit power plant.
The project has been designated a Strategic Integrated Project under the Infrastructure Development Act and forms part of the Integrated Resource Plan 2025. Development will follow a private sector participation model that leverages strategic partnerships, project finance and long term power offtake agreements.
According to Eskom, the project is expected to attract significant international investment while supporting industrial development in Richards Bay and the wider region.
Eskom Group Chief Executive Dan Marokane said gas would serve as a bridge fuel in South Africa’s transition to a lower carbon energy system, providing reliable generation capacity alongside renewable technologies such as solar and wind.
He said securing foundation customer status at the Zululand Energy Terminal would be a critical enabler for Eskom’s 3 GW gas programme, supporting long term fuel supply arrangements, reducing market volatility and enhancing system reliability in line with IRP 2025 objectives.
Zululand Energy Terminal Director and Project Owner Oliver Naidu said Eskom’s participation as an anchor customer demonstrates growing confidence in LNG as a solution for energy security, grid stability and industrial growth.
Naidu added that the agreement strengthens the commercial foundation of the terminal and supports progress towards a Terminal Use Agreement, financial close and the delivery of South Africa’s first LNG import terminal.
The partnership also supports the objectives of IRP 2025, which calls for 6 GW of gas fired generation capacity by 2030, split equally between Eskom and the Gas Independent Power Producer Procurement Programme.
Eskom said the development addresses three key priorities for the power sector. These include strengthening energy security while supporting increased renewable energy deployment, reducing diesel consumption through greater use of gas for mid merit generation, and mitigating South Africa’s anticipated gas supply shortfall, commonly referred to as the gas cliff.
Author: Bryan Groenendaal
