ExxonMobil has signed a preliminary deal to supply liquefied natural gas to Zululand Energy Terminal, which will be South Africa's first LNG import facility once built.
The agreement underscores South Africa’s growing commitment to diversifying its energy mix. Coal currently accounts for the majority of the nation’s electricity generation, but government and industry stakeholders are increasingly investing in natural gas infrastructure as part of a cleaner, more reliable energy strategy.
Reuters reported in March that ZET was seeking to finalize an LNG supply arrangement with ExxonMobil. The new agreement reinforces the strategic importance of Richards Bay, where the terminal is under development on South Africa’s east coast.
According to Oliver Naidu, director of ZET, ExxonMobil’s involvement helps position Richards Bay as a key gateway for LNG imports while supporting efforts to establish a competitive and sustainable gas market in South Africa.
“ExxonMobil’s participation reinforces the importance of Richards Bay as an entry point for LNG and supports our plans to unlock a competitive and sustainable gas market,” Naidu said.
ExxonMobil has identified South Africa as a priority market as the company expands its global LNG business. The energy major aims to increase its LNG supply capacity to more than 40 million metric tons per annum (mtpa) by 2030.
“This agreement reflects ExxonMobil’s global LNG experience and our commitment to support South Africa’s energy security with reliable supply,” said Andrew Barry, chairman of ExxonMobil LNG Market Development Inc.
The supply agreement follows another significant development for the project. Earlier this month, South African state-owned utility Eskom signed a long-term LNG agreement with ZET that will support a planned 3,000-megawatt gas-to-power facility, helping address the country’s ongoing electricity challenges.
Zululand Energy Terminal expansion targets long-term growth
Development of the Zululand Energy Terminal will occur in phases. Phase 1 includes a floating storage unit and an onshore regasification system capable of handling approximately 3 mtpa of LNG, equivalent to about 400 million standard cubic feet of natural gas per day.
Phase 2 will expand the facility with additional onshore storage and regasification capacity, increasing throughput to 4.5 mtpa, or roughly 600 million standard cubic feet per day. Once completed, the two-phase project is expected to represent an investment of approximately $1 billion.
As South Africa continues its energy transition, the Zululand Energy Terminal is expected to play a central role in securing reliable LNG supplies, supporting new gas-fired power generation and laying the foundation for a more diversified energy future.
