Port of Richards Bay: Transnet National Ports Authority (TNPA) has achieved a key milestone in the development of the South Dunes Precinct at the Port of Richards Bay by signing two major Terminal Operator Agreements (TOA).
According to South African Government News Agency, the first agreement for Liquefied Natural Gas (LNG) has been signed with Zululand Energy Terminal, while the other agreement is signed with FFS Tank Terminals. The agreements represent a leap forward in advancing South Africa’s energy and maritime sectors, underscoring TNPA’s strategic objectives to foster sustainable development and investment in critical infrastructure.
Speaking at the signing ceremony held at South Pier in the South Dunes Precinct at Port of Richards Bay in KwaZulu-Natal, Andile Sangqu, Transnet Board chairperson, said the agreements signify Transnet’s commitment to support South Africa’s crucial pathway to economic growth and industrialisation through energy transformation and enhanced energy security. ‘They represent a dual achievement, the introduction of a pioneering LNG import facility and the enhancement of our liquid bulk capacity through the redevelopment of FFS Tank Terminals,’ Sagqu said.
Sangqu stated that the LNG terminal is a critical response to the nation’s energy challenges. ‘Overall, the TNPA LNG project is aligned with the Department of Mineral Resources and Energy (DMRE) plans to deliver 6 000 MW of Gas-to-Power in South Africa. This 6 000 MW is split into 3 000 MW as per Integrated Resource Plan (IRP) and 3 000 MW for Eskom new generation in the UMhlathuze region. By enabling the importation of Liquefied Natural Gas, we are promoting the development of sustainable source of energy to meet limited and depleting gas supplies,’ he said.
In his remarks, Tshokolo Nchocho, TNPA Board Chairperson, emphasized that the agreements mark significant progress in advancing the country’s energy security, economic growth and the transformation of port infrastructure. ‘The establishment of South Africa’s first LNG Import Terminal represents a strategic response to our nation’s energy challenges,’ Nchocho said.
KwaZulu-Natal Premier Thami Ntuli praised the signing of the two multibillion rand TOAs, noting they will advance South Africa’s energy and maritime sectors and bolster economic growth and job creation. ‘As detailed by Transnet already, this is a significant milestone in the development of the South Dunes Precinct at the Port of Richards Bay and is set to support the Gas-to-Power Programme of South Africa,’ Ntuli said.
Ntuli added that the agreements align with the DMRE’s Strategic Plan (2020-25) that aims to transition towards cleaner energy sources. ‘Natural gas is becoming increasingly accepted as a viable alternative or transitional source of power which although not a renewable, is far cleaner and less expensive in capital cost than coal which currently supports our base load,’ Ntuli said.
Acting TNPA Chief Executive, Phyllis Difeto, noted that the milestone underscores a commitment to transforming the country’s logistics sector and aligning with national energy goals. ‘These initiatives highlight our commitment to transformation and workforce empowerment,’ she said.
On 15 December 2022, TNPA issued a Request for Proposal (RFP) to secure a terminal operator for the development of a LNG terminal in the South Dunes Precinct. Following a comprehensive evaluation process, Zululand Energy Terminals was appointed as the preferred bidder. The project involves the design, development, financing, construction, operation, and maintenance of the LNG terminal over a 25-year concession period.
TNPA has also finalized a 25-year concession TOA with FFS Tank Terminals for the development and operation of a liquid bulk terminal specializing in bunker fuels at the Port of Richards Bay. The facility, located at the former Engen bunker terminal, will enhance the port’s capacity for handling liquid bulk and foster economic growth.
The development of these two terminals is poised to transform the economic landscape of the region, with the LNG terminal alone projected to create over 1,000 job opportunities during construction and operations.