Richards bay: Eskom and Zululand Energy Terminal (ZET) have signed a Heads of Agreement (HOA) to establish a long-term strategic partnership aimed at supporting South Africa's gas-to-power programme. The agreement designates Eskom as a 'foundation customer' at the proposed Zululand Energy Terminal, which will facilitate access to liquefied natural gas (LNG) import, storage, and regasification infrastructure. This collaboration underpins Eskom's planned 3,000MW gas-to-power initiative.
According to South African Government News Agency, the signing ceremony underscored both parties' commitment to advancing regulatory approvals, commercial contracting, and infrastructure development necessary for the project's success. ZET, a joint venture involving Vopak Terminal Durban, Reatile Group Proprietary Limited, and Transnet Pipelines, was granted a concession by the Transnet National Ports Authority to develop and manage the LNG terminal.
The partnership is a pivotal step toward enhancing South Africa's gas infrastructure, contributing to energy supply diversification and economic growth. Supported by the Ministry of Electricity and Energy, the Ministry of Transport, and Transnet, the project aims to facilitate gas-to-power development, offering flexible and dispatchable generation capacity to complement renewable energy and maintain grid stability.
Eskom's 3,000MW Gas-to-Power Project in Richards Bay Industrial Development Zone (RBIDZ) in KwaZulu-Natal will primarily use regasified LNG as its fuel source. The power plant is expected to operate for 25 years as a mid-merit plant. It is designated as a Strategic Integrated Project under the Infrastructure Development Act 23 of 2014 and the Integrated Resource Plan (IRP) 2025.
The project will employ a Private Sector Participation model, attracting international investment and promoting industrial development in Richards Bay. Gas is viewed as a transitional fuel supporting the move to a low-carbon energy system, complementing renewable sources like solar and wind to ensure consistent power supply.
Eskom's Group Chief Executive, Dan Marokane, emphasized that securing 'foundation customer' status at Zululand Energy Terminal is crucial for the 3,000MW gas programme, aligning with the IRP 2025 objectives to ensure system reliability.
Oliver Naidu, Director and Project Owner of Zululand Energy Terminal, highlighted the significance of the agreement for ZET and its role in South Africa's energy future. Eskom's involvement signals confidence in LNG as a means of ensuring energy security and industrial growth.
The partnership addresses key operational imperatives: energy security, grid stabilization, and the mitigation of anticipated gas supply depletion from Mozambique's fields. Gas is essential for reducing coal dependence and supporting renewable integration, ensuring grid stability alongside other energy sources and reducing diesel reliance for mid-merit operations.