South Africa’s state-owned power utility, Eskom, has signed a long-term liquefied natural gas (LNG) agreement with the Zululand Energy Terminal (ZET), a key step toward supplying fuel for its planned 3,000-megawatt gas-to-power project in Richards Bay, according to reports by Reuters. The agreement is expected to strengthen South Africa’s efforts to diversify its energy mix and improve long-term electricity security.
Under the agreement, Eskom will become a foundation customer of the proposed Zululand Energy Terminal, gaining access to LNG import, storage, and regasification infrastructure. The terminal, located at Richards Bay Port in KwaZulu-Natal, is being developed by a consortium that includes Dutch storage company Vopak, South African energy firm Reatile Group, and Transnet Pipelines.
The Richards Bay project forms part of South Africa’s Integrated Resource Plan, which allocates 6,000 MW of gas-fired generation capacity by 2030, with Eskom expected to deliver half of that capacity. The planned power station will use regasified LNG as its primary fuel source over a projected 25-year lifespan and is intended to operate as a mid-merit plant supporting renewable energy integration and grid stability.
Eskom Chief Executive Dan Marokane said gas will serve as a critical bridge fuel in South Africa’s energy transition, complementing intermittent renewable sources such as wind and solar power. Analysts say the agreement represents a significant milestone for the country’s emerging LNG industry and could help reduce reliance on diesel-powered generation while supporting industrial growth and energy security.
