Key facts
- ExxonMobil and Zululand Energy Terminal (ZET) signed a preliminary agreement for LNG supply.
- The deal is for South Africa's first LNG import terminal at the Port of Richards Bay.
- The terminal is a joint venture between Vopak Terminal Durban and Transnet Pipelines.
- The agreement aims to boost gas supply and support South Africa's transition from coal power.
- South Africa anticipates a significant gas supply shortfall by 2030.
- The New Development Bank is lending South Africa $1 billion for urban infrastructure upgrades.
ExxonMobil and the developer of South Africa's first LNG import terminal, Zululand Energy Terminal (ZET), have signed a preliminary agreement for Exxon to supply liquefied natural gas (LNG) to the proposed facility at the Port of Richards Bay. ZET, a joint venture between Vopak Terminal Durban and Transnet Pipelines, is expected to be the country's first LNG import facility, enabling storage, regasification, and distribution for power generation and industrial users.
This Heads of Agreement (HoA) is seen as a significant step towards increasing gas supply in South Africa and facilitating its transition away from heavy reliance on coal for power. The terminal is intended to position Richards Bay as a key LNG entry point and support a more secure and diversified energy mix. South Africa currently imports natural gas via pipeline from Mozambique, but anticipates a substantial gas supply shortfall by 2030 as existing supplies decline, posing risks to power generation, industry, and economic growth.
ExxonMobil views South Africa as a high-priority market for long-term LNG sales, with Andrew Barry, chairman of ExxonMobil LNG Market Development Inc, highlighting the growing global LNG market and the opportunity to meet energy demand. Separately, the New Development Bank is providing South Africa with a $1 billion loan for infrastructure upgrades in its eight largest cities.