- Zululand Energy Terminal to become South Africa’s first LNG import facility, addressing impending natural gas supply shortfalls.
- Collaboration aims to boost energy security, industrial growth, and downstream gas-to-power opportunities in the province.
Netherlands-headquartered tank storage and terminal operator Vopak, through its South African subsidiary, Vopak South Africa, together with Transnet Pipelines, has signed a memorandum of understanding (MoU) with the Richards Bay Industrial Development Zone (RBIDZ) to advance gas development in KwaZulu-Natal. The agreement was finalised on March 13 on the sidelines of the inaugural KZN Energy Indaba hosted by RBIDZ and the KwaZulu-Natal provincial government.
The MoU coincides with Vopak South Africa and Transnet Pipelines finalising commercial agreements and contractor appointments ahead of a final investment decision (FID) for the Zululand Energy Terminal (ZET) at the Port of Richards Bay. The project will establish South Africa’s first liquefied natural gas (LNG) import terminal, designed to address an impending domestic gas supply gap.
South Africa currently consumes approximately 185 PJ per year of natural gas, nearly 90% of which is imported from the Pande-Temane gasfields in Mozambique. These resources are depleting, while petrochemicals company Sasol has confirmed it will cease gas supply to the market by June 2028, potentially affecting 300 large-scale industrial gas users and placing pressure on the national economy if alternative sources are not developed.
The ZET project, a partnership between Vopak South Africa – through Vopak Terminal Durban – and Transnet Pipelines, will build and operate LNG import and regasification infrastructure at Richards Bay. The MoU stipulates the establishment of a gas custody transfer station to distribute regasified LNG to transmission pipelines and industrial users.
Oliver Naidu, president of Vopak South Africa, highlighted the strategic importance of collaboration between public and private stakeholders. “Our partnership with RBIDZ lays the foundation for an energy corridor that can unlock industrial growth, improve energy security and offer new opportunities for local businesses and communities,” he said.
However, the ZET FID remains pending due to delays in Eskom’s 3 000 MW gas-to-power project in Richards Bay, following public consultation issues. In September 2025, the Supreme Court of Appeal set aside Eskom’s environmental authorisation for the proposed combined cycle gas power plant, citing inadequate publication of public participation notices in isiZulu. Eskom is required to restart the environmental authorisation process but maintains that gas will remain a critical component of South Africa’s energy mix.
“Gas acts as a backbone for renewable-energy integration owing to its flexibility and fast-response capability. As more renewables come online, dispatchable generation is needed to offset their variability, ensuring energy security and sustaining the gains of the Generation Recovery Plan. At this stage, gas is the quickest and most effective solution for back-up and load-following,” said Alfred Seema, Eskom strategy delivery group executive.
Vopak South Africa has deferred its final investment decision on the LNG import terminal to the first quarter of 2028, aligning with progress on complementary gas-to-power initiatives in the region.
Author: Bryan Groenendaal
