TNPA selects operator for LNG terminal in South Africa

Transnet National Ports Authority (TNPA) has appointed the Vopak Terminal Durban & Transnet Pipelines (TPL) Consortium Venture as the preferred bidder to develop and operate a liquefied natural gas (LNG) terminal at the Port of Richards Bay in South Africa.

Specifically, following a procurement process through a ‘Request for Proposals,’ TNPA appointed the consortium venture to design, develop, construct, finance, operate and maintain the LNG terminal in the South Dunes Precinct at the Port of Richards Bay for a period of 25 years.

According to TNPA, the terminal is set to change the economic dynamics of the port city, the KwaZulu Natal Province and introduce an alternative source of energy as South Africa battles an energy crisis and transitions towards decarbonization.

The terminal is a partnership between the private sector and the public sector, with the private sector as the lead investor. TNPA will invest in the common user port infrastructure, while the terminal operator is expected to provide the terminal infrastructure.

TNPA noted that this appointment brings the company closer to its strategic goal of assisting the country through the LNG terminal and as a midstream LNG importation infrastructure for markets in the KwaZulu Natal hinterland.

The project is in line with the Department of Mineral Resources and Energy’s (DMRE’s) ‘Strategic Plan’ for 2020-25, which focuses on the development of the gas market as an alternative source of energy to meet limited and depleting energy supply, TNPA said, adding that it also supports the country’s ‘Integrated Resources Plan’ and its gas-to-power generation targets.

The commercial operation of the project is expected during 2027, with the next step being the signing of the terminal operator agreement which is currently under negotiation.

Moshe Motlohi, TNPA Managing Executive for the Eastern Region ports, stated: “TNPA is excited about the prospects this project brings, especially that this gas infrastructure project will be the first of its kind in South Africa.”

To remind, in 2023, in support of South Africa’s transition into a low-carbon economy, TNPA issued a request for information (RFI) for the development of a terminal facility and related facilities for hydrogen initiatives at its commercial seaports.

The RFI assesses the market interest in developing, designing, constructing, financing, operating and maintaining an import and export terminal for hydrogen initiatives, TNPA said, adding that this includes green hydrogen, green ammonia, green methanol and or grey hydrogen at the ports of Cape Town, Durban, East London, Mossel Bay, Ngqura, Port Elizabeth and Saldanha.