The Richards Bay economy on the north coast of KwaZulu-Natal continues to be on the rise, with the region under the King Cetshwayo district becoming a highly sought-after investment destination.
State-owned entity Transnet National Ports Authority (TNPA) has announced that it has signed a 25-year operator agreement with the Zululand Energy Terminals (ZET).
Natural gas import terminal
At the core of the pact is the development of the liquefied natural gas import terminal at the Port of Richards Bay’s South Dunes precinct.
Richards Bay is Africa’s deepest port, and it’s also home to Richards Bay Coal Terminal, the largest coal facility in Africa.
“The first agreement for liquefied natural gas (LNG) has been signed with the Zululand Energy Terminal. While the other agreement is signed with FFS Terminals.
“The agreements represent a leap forward in advancing South Africa’s energy and maritime sectors. This is underscoring TNPA’s strategic objectives to foster sustainable development and investment in critical infrastructure,” the entity explained.
Energy transformation and enhanced energy security
According to Andile Sangqu, Transnet board chairperson, the agreements signified the importance of the state entity in enhancing the country’s economic growth and industrialisation. This is done through energy transformation and enhanced energy security.
“They represent a dual achievement: the introduction of a pioneering LNG import facility and the enhancement of our liquid bulk capacity through the redevelopment of FFS Tank Terminals. It is a critical response to the nation’s energy challenges,” he said.
Sangqu further stated that the project is aligned with the Department of Minerals Resources and Energy (DMRE) plans to deliver 6, 000MW of gas-to-power in South Africa.
“This 6, 000MW is split into 3, 000MW as per the integrated resource plan (IRP) and 3, 000MW for the Eskom new generation in the uMhlathuze region. By enabling the importation of liquefied natural gas, we are promoting the development of a sustainable source of energy to meet limited and depleting gas supplies,” said Sangqu.
KZN Premier Thami Ntuli explained the signing of the R2-billion Terminal Operator Agreements (TOA) augured well for the province and the country.
Set to advance South Africa’s energy and maritime sectors
“It will advance South Africa’s energy and maritime sectors and help grow the country economy. And it will spur the creation of much-needed jobs.
“Natural gas is becoming increasingly accepted as a viable alternative or transitional source of power, which, although not renewable, is far cleaner and less expensive in capital cost than coal, which is currently our base load,” Ntuli said.
On December 15 2022, TNPA issued a Request for Proposal (RFP) to secure a terminal operator for the development of an LNG terminal in the South Dunes Precinct.
Preferred bidder
“Following a thorough evaluation process in compliance with Section 56 of the National Ports Act (Act No. 12 of 2005), Zululand Energy Terminals was appointed as the preferred bidder. It provides port infrastructure and marine services at eight commercial seaports in South Africa in the cities of Richards Bay, Cape Town, Saldanha, Port Elizabeth, Durban, East London, Mossel Bay and Ngqura.
The project involves the design, development, financing, construction, operation, and maintenance of the LNG terminal over a 25-year concession period.
