Eskom and Zululand Energy to advance gas-to-power development Eskom and Zululand Energy Terminal (ZET) are pleased to announce the signing of a Heads of Agreement (HOA) that establishes the framework for a long-term strategic partnership to support South Africa’s gas-to-power programme. E skom will assume ‘foundation cus- tomer’ status at the proposed Zulu - land Energy Terminal, which will pro- vide open access to liquefied natural
gas (LNG) imports, storage and regasification infrastructure to underpin Eskom’s planned 3 000 MW gas-to-power programme. With the recent signing of a Heads of Agreement (HOA), both Eskom and Zululand Energy Terminal have reaffirmed their commitment to advancing the necessary regulatory approvals, long-term commercial contracting approach and structuring, and the infrastructure development required to bring the project to fruition. ZET, a joint venture between Vopak Terminal Durban, owned by Royal Vopak, a company with its head office in the Netherlands; Reatile Group Proprietary Limited, a South African company; and Transnet Pipelines, a division of Transnet SOC Ltd, was awarded a concession by Transnet National Ports Authority (TNPA) to develop, construct, operate and maintain the LNG terminal. This partnership represents a significant step in advancing South Africa’s gas infra- structure ecosystem and supports national efforts to diversify energy supply, strength- en energy security and enable economic growth. Backed by the Ministry of Electricity and Energy, the Ministry of Transport and Transnet, the project will help facilitate gas-to-power development, providing the flexible and dispatchable generation capacity required to complement renewable energy, maintain grid stability and support the coun- try’s long-term energy transition. Eskom’s Richards Bay 3 000 MW Gas- to-Power Project is to be constructed and operated in the Richards Bay Industrial Development Zone (RBIDZ), in KwaZulu- Natal. This project envisages importing and consuming regasified LNG as the power plant's primary fuel source. The power plant's lifecycle is expected to be 25 years, and it is planned to operate primarily as a mid-merit plant. It is designated as a Strategic Integrated Project under the Infrastructure Development Act 23 of 2014 and in the Integrated Resource Plan (IRP) 2025. The project will be developed through a Private Sector Participation (PSP) model, leveraging strategic partners, project finance,
Zululand Energy Terminal Director, Oliver Naidu, and Dan Marokane, Eskom’s Group Chief Executive, at the signing of the Heads of Agreement framework to establish a strategic partnership to support South Africa’s gas-to-power programme.
"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 devel- oped and introduced onto the grid. The avail- ability of dispatchable power is at the very heart of the energy transition; industry cannot operate without it, as it forms the backbone of renewable energy integration into the grid. “Securing ‘foundation customer’ status at the Zululand Energy Terminal provides a criti - cal enabler for our 3 000 MW gas programme, with the intention of a long-term contracting approach to minimise volatility and support system reliability while aligning with the IRP 2025 objectives,” says Eskom’s Group Chief Executive, Dan Marokane. "Today’s signing marks a significant mile - stone for ZET as we advance our role in sup - porting 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. “This agreement strengthens the com- mercial foundation of the terminal, and we look forward to building a long-term partner- ship as we progress towards a Terminal Use Agreement, financial close and the delivery of South Africa’s first LNG import terminal,” concludes Zululand Energy Terminal Director and Project Owner, Oliver Naidu. https://www.zululandenergyterminal. co.za/
and long-term power offtake arrangements. The downstream power plant represents a large-scale capital investment, attracting in- ternational capital and accelerating industrial development within Richards Bay. Strengthening energy security The IRP 2025 calls for 6 000 MW of Gas by 2030, with 3 000 MW to be procured under the Gas IPP program and 3 000 MW to be delivered by Eskom. To achieve this, the partnership directly addresses three core operational imperatives: • Energy security and renewable support: Gas is required to ensure and guarantee energy security while reducing coal de- pendence and supporting the increased reliance on intermittent renewables as per IRP 2025. • Grid stabilisation and diesel utilisation reduction: Gas will co-exist with Eskom’s other grid stabilisation energy sources, such as batteries and pumped hydro, and will help reduce diesel usage for mid-merit operation. All solutions must work together as South Africa transi- tions its energy system to renewables in a liberalised marketplace. • Mitigating the Gas Cliff: The project also addresses the emerging and an- ticipated gas cliff, positioning gas as a key enabler for both power generation and industrial use. While the primary focus is power generation, it remains important to support and enable broader industrialisation.
28 ¦ MechChem Africa • July-August 2026
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