Eskom has signed a Heads of Agreement with Zululand Energy Terminal (ZET), giving it foundation customer status at the proposed Richards Bay LNG import terminal that will support its planned 3 000 MW gas-to-power project.
The agreement also establishes a framework for a long-term partnership as Eskom and ZET progress regulatory approvals, long-term commercial contracting, project structuring and infrastructure development. ZET is a joint venture between Vopak Terminal Durban, Reatile Group and Transnet Pipelines.
The agreement moves the commercial side of the delayed Richards Bay LNG rollout forward after the Supreme Court of Appeal set aside Eskom’s environmental authorisation for the gas-to-power project in September 2025, pushing the target to 2028.
Energy hub
The KwaZulu-Natal Logistics Hub masterplan sees Richards Bay “serving as the country’s leading industrial port, as a premier dry bulk and liquefied natural gas port”.
According to TNPA, the LNG project includes a floating storage unit and an onshore regasification facility capable of handling two million tonnes of LNG a year, expandable to five million tonnes.
Transnet is also in the process of upgrading the existing 580 km Lilly pipeline, which runs from Secunda through Empangeni to Durban, to handle LNG.
The 3 000 MW gas-to-power project will be constructed and operated in the Richards Bay Industrial Development Zone in KwaZulu-Natal, Eskom and ZET said in a joint statement.
Regasified LNG is expected to be the primary fuel source for the plant, which has a planned 25-year lifecycle and will operate mainly as a mid-merit facility, the statement said.
It has been designated as a Strategic Integrated Project under the Infrastructure Development Act and is included in the Integrated Resource Plan 2025.
Development will follow a private sector participation model, using strategic partners, project finance and long-term power offtake arrangements.
The Integrated Resource Plan 2025 calls for 6 000 MW of gas by 2030, split between 3 000 MW under the Gas IPP programme and 3 000 MW to be delivered by Eskom.
“Gas is being used as a bridge fuel to support the transition to a low-carbon energy system. These gas plants are designed to complement intermittent renewable sources like solar and wind, ensuring reliable 24/7 power, while clean energy technologies are being developed and introduced onto the grid,” said Eskom group chief executive Dan Marokane.
“Today’s signing marks a significant milestone for ZET as we advance our role in supporting South Africa’s energy future. As one of our anchor customers, Eskom’s participation demonstrates growing confidence in LNG as an enabler of energy security, grid stability and industrial growth,” said ZET director and project owner Oliver Naidu.
“This agreement strengthens the commercial foundation of the terminal, and we look forward to building a long-term partnership as we progress towards a Terminal Use Agreement, financial close and the delivery of South Africa’s first LNG import terminal,” he said.
Wider port projects
Other Richards Bay infrastructure projects are also under way.
In February 2026, Transnet issued a Request for Qualification for a partner in a private sector participation project at the Richards Bay Dry Bulk Terminal.
Container operations have also been factored into the port’s development plans.
In May 2025, TNPA signed a concession agreement with Grindrod and Eyamakhosi Resources to build and operate a container terminal in Richards Bay.
“This state-of-the-art hub will facilitate seamless movement across rail, road and sea, ultimately serving as a catalyst for regional economic integration by reducing logistics costs and improving reliability for cargo owners,” reads a joint statement.
Back-of-port projects include the reconfiguration and upgrading of the TNPA Bayvue Rail Yard in Richards Bay, a 20 MW solar plant and the upgrading of Newark Road leading into the port.
One of the challenges facing Richards Bay is the erosion of Alkantstrand Beach next to the northern breakwater, which is threatening the TNPA port control building currently under construction, according to a TNPA tender request.
It states that the Port of Richards Bay has signed a memorandum of agreement with the City of uMhlathuze to pump a minimum of 950 000 m³ of sand annually onto Alkantstrand Beach to combat shoreline erosion.
