Zululand Energy Terminal (ZET), South Africa’s first liquified import gas terminal, is expected to attract investments worth more than $1bn (R16.1bn) as the country grapples with energy challenges and pushes to move to green energy sources.
Based at the Port of Richards Bay Southern Dunes, ZET is a joint venture between Vopak Terminals and Transnet Pipelines (TPL) with a 25-year lease agreement. Operations are expected to begin in 2028, and the facility will produce at least 2-million tonnes of throughput initially.
Vopak Terminals president and ZET project owner Oliver Naidu said this week the project will unlock economic growth for the country. “This project, from an investment perspective and the ripple effect it is going to have, will be in excess of $1bn, just on the Zululand Energy side,” he said at the 60th anniversary of Transnet Pipelines in Kempton Park.
“The upgrade of the TPL pipeline, the localisation effects of what it is going to do to Richards Bay and the entire community... the long-term sustainability of industries that we will place in there, I think it is going to be enormous.”
Investor confidence would bolster the economy, Naidu said.
The ZET is a strategic move to improve South Africa’s energy security amid the looming “gas cliff” and the decommissioning of power stations. “The total value chain impact that it’s going to have [will be enormous]. It is just not about us putting this thing on the ground in Richards Bay. It is much more than that. That is what the impact of the gas strategy and the first liquefied natural gas terminal is going to have in our country,” he said.
ln 2025, energy regulator, Nersa, published a report focused on creating a conducive environment for gas supply, improving local gas production, and decarbonisation of the gas sector to ensure a gas supply that drives economic growth.
Also speaking at the event, the deputy director-general at the department of transport, Mthunzi Madiya, said the department wanted to expand the country’s petroleum pipeline into the rest of Sadc in line with plans to exploit the growing regional gas opportunities.
Madiya said South Africa was not “optimising” its petroleum pipeline infrastructure. This would have to be done for the expansion into Sadc to take off, and there need to be synergies between Sars’ customs department and National Treasury.
“Most countries come to Durban to collect molecules, but if we are able to have an understanding at a policy level with Treasury and customs, we will be able to find each other. There are many challenges there; once you want to tap into Sadc, there are limitations from a policy point of view,” he said.
Transnet Pipelines was founded 60 years ago as a long-distance fuel pipeline from the coast to inland provinces. It boasts 3,114km of pipelines and transports 16-billion litres of fuel a year. It further evolved with the development of gas pipelines when the Lily Gas Pipeline enabled the transportation of natural gas from Secunda in Mpumalanga to KwaZulu-Natal.
Sibongiseni Khathi, acting CEO of Transnet Pipelines, said South Africa needed to clarify issues regarding regulation. He said the closure of coastal refineries had been an underlying cause of supply challenges.
“The question is how we ensure security of supply in the country by ensuring we protect the existing refineries to make sure they are effective and profitable. And how do we ensure that, where we have to import, we’re able to import and ensure security of supply,” he said.
Transnet group CEO Michelle Phillips said competition was the one thing that kept Transnet moving forward. “Right now, when we talk about optimising the pipeline and the landlocked countries that we’re not able to export to — we need to get that right because the product is going to be moving there via other countries. Mozambique, Namibia ... they are moving this product, and it is important for us to get that right. We need to get public infrastructure that is optimally utilised,” she said.
Phillips said to do that, Transnet needed to ensure that as countries brought in the products, these went to its facilities efficiently.
Madiya said TPL needed to start looking beyond liquid fuel and position itself for opportunities in terms of the green energy transition — saying hydrogen will be the main commodity in the Boogebaai port in the Northern Cape, which is being developed.
Transnet rail volumes have been declining due to lack of investments, crime, and vandalism. To arrest the decline the government’s logistical reforms have enabled private players on the rail network to improve efficiencies, particularly for bulk commodities, including coal.
Business Times
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