South Africa is accelerating efforts to broaden its energy portfolio beyond coal, marked by a pivotal heads of agreement signed between Eskom and the Zululand Energy Terminal. Electricity and Energy Minister Kgosientsho Ramokgopa presided over the ceremony, which advances plans for a large-scale liquefied natural gas (LNG) import and power generation facility in Richards Bay, KwaZulu-Natal.
The agreement designates Eskom as a long-term off-taker for the proposed LNG terminal, ensuring the utility has access to imported gas for future electricity production. Eskom board chair Mteto Nyati highlighted the strategic significance of the partnership. “While the deal has not reached a full commercial scale quite yet, it does lay the groundwork for the country to generate up to six gigawatts of energy from gas, a key electricity source for the government’s integrated resource plan,” Nyati said. He noted the initiative supports long-term energy security, creates thousands of employment opportunities across construction, operations, and supply chains, fosters skills development in gas engineering and energy infrastructure, and mobilizes substantial private capital.
Zululand Energy Terminal Chief Executive Dan Marokane emphasized that gas-to-power is central to South Africa’s evolving energy landscape, with developers targeting commissioning by the early 2030s. “We are racing that there’s time to get through to that point. Uh so 2030, 2031 is what we realistically trying to get to,” Marokane stated. He identified environmental permitting and final investment commitments as immediate priorities. The project’s second phase plans to add an onshore LNG storage tank of roughly 220,000 cubic meters alongside expanded regasification infrastructure, raising total throughput to approximately 4 million tons per annum—equivalent to about 600 million standard cubic feet per day.
Transnet, which is facilitating infrastructure support for the Richards Bay terminal, welcomed the agreement as a catalyst for regional development. A Transnet spokesperson said, “This agreement sends a strong commercial signal to the market. It demonstrates confidence in the project, strengthens its bankability and brings South Africa closer to establishing its first LNG import terminal.” Projections indicate the venture could attract between 70 and 88 billion Rand in power plant investment to the Richards Bay Industrial Development Zone.
Minister Ramokgopa stressed that timely action on new generation capacity is essential. “South Africa cannot afford to delay investments in new generation capacity and energy infrastructure,” he asserted. He framed the country as “a battery of the region,” positioned to support neighboring nations’ electricity needs through value-added energy projects. The government views natural gas as a complementary source to renewables, helping mitigate supply vulnerabilities as regional gas reserves face growing demand. The initiative also aligns with broader reforms to modernize state-owned enterprises and reduce dependence on Mozambican LNG supplies.
Should the Richards Bay project proceed as planned, it could set the tempo for South Africa’s next phase of energy system development—integrating diversified sources, enhancing grid resilience, and supporting sustainable economic expansion.