Eskom, ZET Partner on 3GW Gas-to-Power Project in South Africa

South African power utility Eskom and Zululand Energy Terminal (ZET) have signed a Heads of Agreement (HoA) to advance the development of a 3GW gas-to-power project aimed at strengthening the country's energy security and supporting its transition to cleaner energy sources.

The agreement establishes a framework for collaboration between the two organisations, with Eskom set to serve as the foundation customer for the proposed Zululand Energy Terminal.

Under the arrangement, the terminal will provide open access to liquefied natural gas (LNG) import, storage and regasification infrastructure required to support Eskom's planned gas-fired power generation capacity.

The project will be located within the Richards Bay Industrial Development Zone in KwaZulu-Natal and is expected to play a key role in South Africa's long-term energy strategy.

ZET director and project owner, Oliver Naidu, described the agreement as a major milestone for the project, noting that Eskom's participation reflects growing confidence in LNG as a reliable source of energy that can enhance grid stability and support industrial growth.

The LNG terminal is being developed by ZET, a joint venture involving Vopak Terminal Durban and Transnet Pipelines. The facility will operate under a concession granted by the Transnet National Ports Authority.

Eskom Group Chief Executive Officer, Dan Marokane, said natural gas would serve as a transition fuel, helping to bridge the gap between conventional power generation and renewable energy sources such as solar and wind.

According to him, gas-fired plants provide dispatchable power that can be generated when needed, making them essential for maintaining grid reliability as renewable energy capacity expands.

The planned power plant will use regasified LNG as its primary fuel and is expected to operate over a 25-year period, mainly as a mid-merit generation facility.

Both parties have agreed to pursue the necessary regulatory approvals, conclude commercial arrangements and move ahead with the infrastructure required to deliver the project.

The initiative has received support from South Africa's Ministry of Electricity and Energy, the Ministry of Transport and Transnet, and has been designated a Strategic Integrated Project under the country's Infrastructure Development Act.

The project also aligns with South Africa's Integrated Resource Plan (IRP) 2025, which targets the addition of 6GW of gas-fired power generation by 2030.

Once completed, the project is expected to strengthen energy supply security, reduce reliance on diesel and coal-fired generation, support renewable energy integration and contribute to broader industrial development in South Africa.