Zululand Energy Terminal, a joint venture between Vopak Terminal Durban and Transnet Pipelines (TPL), has officially signed the Terminal Operator Agreement (TOA) with Transnet National Ports Authority (TNPA) to design, develop, construct, finance, operate and maintain the LNG terminal at the Port of Richards Bay for a period of 25 years. The signing ceremony took place on 10 February 2025 and follows the RFP award secured in January 2024. This agreement marks the conclusion of detailed negotiations between TNPA, as the port authority, and Zululand Energy Terminal, as the terminal operator.
The agreement grants Zululand Energy Terminal full rights to the land designated for the construction of an LNG import terminal in Richards Bay. This milestone enables Zululand Energy Terminal to proceed with binding agreements with potential customers, supported by an ongoing capacity allocation process. A final investment decision is expected in 2026, contingent on timely customer commitments.
“Vopak’s global expertise in LNG infrastructure, combined with our strong partnership with Reatile Group and Transnet Pipelines, positions us to deliver a world-class terminal in Richards Bay. This project aligns with Vopak’s vision to expand in industrial and gas terminals, providing reliable and sustainable energy solutions for South Africa”, said Oliver Naidu, President of Vopak South Africa.
The LNG terminal is a pivotal development in South Africa’s efforts to ensure energy security as the country faces a looming “gas cliff” and the gradual decommissioning of coal-fired power stations. The terminal will support flexible power generation while fostering industrial growth in KwaZulu-Natal and beyond. Industries connected to the nearby Lilly Pipeline, owned by TPL, stand to benefit significantly.
The project will be executed in two phases:
Phase 1: Development of a Floating Storage Unit (FSU) with a capacity of 135,000-174,000 cubic meters, onshore regasification infrastructure capable of ~400 mmscfd, and optional truck loading facilities. A new pipeline connection will link the terminal to the Lilly Pipeline via Empangeni, with a tie-in point for Richards Bay Industrial Development Zone customers.
Phase 2: Construction of an onshore storage tank with a capacity of up to 220,000 cubic meters, replacing the FSU. This phase will increase send-out capacity to ~600 mmscfd, accommodating planned Gas-to-Power projects in Richards Bay and future gas users nationwide.
“This landmark agreement signifies a bold step forward for South Africa’s energy future. At Transnet Pipelines, we are committed to enabling the country’s energy transition by investing in critical midstream infrastructure. The Zululand Energy Terminal will be a cornerstone of our strategy to provide cleaner energy solutions while fostering industrial development in the region”, said Sibongiseni Khathi, TPL Chief Executive.
Zululand Energy Terminal is in an advanced stage of its capacity allocation process, with negotiations ongoing with a select group of potential customers. The request for proposal process, initiated on 23 September 2024, has identified key stakeholders critical to the project’s success. More information about the capacity allocation process is available on the company’s website: https://www.zululandenergyterminal.co.za/
This LNG terminal represents a significant milestone for South Africa, providing the infrastructure necessary to meet growing energy demands, support the energy transition, and stimulate economic growth in KwaZulu-Natal and the broader national economy.
