Eskom and Zululand Energy Terminal (ZET) have signed a Heads of Agreement establishing a framework for a long-term partnership to support South Africa’s gas-to-power strategy.
Under the agreement, Eskom will take ‘foundation customer’ status at the proposed LNG import terminal, which will provide open-access liquefied natural gas (LNG) import, storage and regasification capacity.
The infrastructure is intended to support Eskom’s planned 3,000 megawatts (MW) gas-to-power programme.
Zululand Energy Terminal (ZET) is a joint venture between Vopak Terminal Durban, owned by Royal Vopak, Reatile Group Proprietary Limited and Transnet Pipelines, a division of Transnet SOC Ltd.
The consortium holds a concession from the Transnet National Ports Authority (TNPA) to develop, construct, operate and maintain the terminal.
Both parties will now progress regulatory approvals, commercial structuring and infrastructure development required to advance the project towards execution.
The partnership forms part of South Africa’s broader energy transition agenda, aimed at diversifying supply, strengthening energy security and supporting economic growth.
Backed by the Ministry of Electricity and Energy, the Ministry of Transport and Transnet, the project is expected to provide flexible generation capacity to complement renewables and support grid stability.
Eskom’s 3,000MW Richards Bay Gas-to-Power project will be located in the Richards Bay Industrial Development Zone (RBIDZ), KwaZulu-Natal.
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It will run on regasified LNG and is expected to operate as a mid-merit plant over a 25-year lifespan.
The project is designated a Strategic Integrated Project under the Infrastructure Development Act 23 of 2014 and aligns with South Africa’s Integrated Resource Plan (IRP 2025).
Development will proceed under a Private Sector Participation (PSP) model, leveraging international investment, strategic partners and long-term offtake agreements.
Dan Marokane, Group Chief Executive, Eskom, said: “These gas plants are designed to complement intermittent renewable sources like solar and wind, ensuring reliable 24/7 power, while clean energy technologies are being developed and introduced onto the grid.
“Securing ‘foundation customer’ status at the Zululand Energy Terminal provides a critical enabler for our 3,000MW gas programme, with the intention of a long-term contracting approach to minimise volatility and support system reliability while aligning with the IRP 2025 objectives.”
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Oliver Naidu, Director and Project Owner, Zululand Energy Terminal, stated: “As one of our anchor customers, Eskom’s participation demonstrates growing confidence in LNG as an enabler of energy security, grid stability and industrial growth.
“This agreement strengthens the commercial foundation of the terminal, and we look forward to building a long-term partnership as we progress towards a Terminal Use Agreement, financial close and the delivery of South Africa’s first LNG import terminal.”
For more information:
Eskom – https://www.eskom.co.za/
