ExxonMobil backs South Africa's first LNG import terminal
ExxonMobil has signed a preliminary agreement to supply liquefied natural gas to what would be South Africa's first LNG import terminal, a step toward shoring up the country's energy supply.
The deal, a Heads of Agreement with the Zululand Energy Terminal at Richards Bay, was announced in June. The terminal, a joint venture involving Vopak and Transnet Pipelines, is intended to enable the import, storage, regasification and distribution of LNG for both power generation and industry.
The project addresses a looming "gas cliff": South Africa is expected to face a significant gas shortfall by 2030 as supplies from Mozambique's Pande-Temane fields decline. Industry stakeholders have warned the gap could hit power generation, industrial operations and economic growth unless alternatives are secured.
State power utility Eskom has signed a long-term LNG agreement with the terminal to act as a foundation customer, supporting a planned 3,000-megawatt gas-to-power plant. The first phase of the project includes a floating storage unit and onshore regasification with capacity of around 3 million tonnes a year.
A second phase would lift total volumes to 4.5 million tonnes annually, bringing the project's expected cost to around $1 billion. Officials say the terminal is a key part of efforts to diversify South Africa's energy mix as it works to stabilise an electricity system long plagued by shortages.
