South Africa: Eskom, Zululand Energy Terminal Sign Agreement To Advance 3,000MW Gas-To-Power Project

South Africa’s state-owned power utility Eskom and Zululand Energy Terminal (ZET) have signed a Heads of Agreement (HOA) to establish a long-term strategic partnership aimed at supporting the country’s 3,000MW gas-to-power programme.

Under the agreement, Eskom will assume “foundation customer” status at the proposed Zululand Energy Terminal, which will provide open-access liquefied natural gas (LNG) import, storage and regasification infrastructure to underpin the utility’s planned gas-fired generation project.

The two parties said the agreement marks a major step towards developing South Africa’s gas infrastructure ecosystem and strengthening energy security while supporting the country’s long-term energy transition.

ZET, a joint venture involving Vopak Terminal Durban, Reatile Group Proprietary Limited and Transnet Pipelines, was awarded a concession by the Transnet National Ports Authority to develop, construct, operate and maintain the LNG terminal.

Eskom’s 3,000MW Richards Bay Gas-to-Power Project will be located in the Richards Bay Industrial Development Zone (RBIDZ) in KwaZulu-Natal.

The facility is expected to operate for 25 years and use regasified LNG as its primary fuel source.

According to Eskom, the project will be implemented through a Private Sector Participation (PSP) model, leveraging strategic partnerships, project finance and long-term power off-take arrangements.

The investment is expected to attract international capital and accelerate industrial development in Richards Bay.

Eskom Group Chief Executive Dan Marokane described gas as a bridge fuel that will support South Africa’s transition to a low-carbon energy system.

“Gas plants are designed to complement intermittent renewable sources such as solar and wind, ensuring reliable 24/7 power while clean energy technologies are being developed and introduced onto the grid,” Marokane said.

He added that securing foundation customer status at the Zululand Energy Terminal provides a critical enabler for Eskom’s 3,000MW gas programme and supports the objectives of the Integrated Resource Plan (IRP) 2025.

Zululand Energy Terminal Director and Project Owner Oliver Naidu said Eskom’s participation demonstrates growing confidence in LNG as a driver of energy security, grid stability and industrial growth.

Naidu said the agreement strengthens the commercial foundation of the terminal and paves the way for a Terminal Use Agreement, financial close and the delivery of South Africa’s first LNG import terminal.

South Africa’s IRP 2025 calls for the development of 6,000MW of gas-fired generation capacity by 2030, with 3,000MW expected to come from the Gas Independent Power Producer (IPP) programme and the remaining 3,000MW to be delivered by Eskom.

The partners said the project will help enhance energy security, complement renewable energy sources, reduce diesel consumption for grid stabilisation and mitigate the country’s anticipated “gas cliff” while supporting broader industrialisation.