Transnet intends to hold a tender for a new Richards Bay LNG terminal

The push to design, build, finance, and operate the LNG terminal comes in the midst of some of Africa’s most severe power outages.
Transnet, South Africa’s state-owned freight logistics firm, said on Thursday that it will go to market within weeks for a new liquefied natural gas (LNG) terminal to be built at the east coast Richards Bay port by 2026.

The push to design, build, finance, and operate the LNG terminal coincides with some of Africa’s worst power outages, as the country tries to reduce emissions from coal-fired power plants, which supply the majority of its electricity needs.

“TNPA is accelerating the implementation of this project to assist with the country’s energy needs and to ensure that it provides the transition energy required for SA’s decarbonization,” said Captain Dennis Mqadi, Richards Bay port manager, in a statement.

He stated that TNPA plans to approach the market in the coming weeks with a request for proposal, ensuring that the project can be “realised” by 2026.

When the request for information, the first step in a tender process, was launched in early February, around 19 companies expressed interest in participating, including major gas developers and operators of gas infrastructure in America, Asia, Europe, and the Middle East.

The project will almost certainly compete with another LNG terminal under construction in neighbouring Mozambique, where South African energy company Gigajoule, in collaboration with TotalEnergies, is planning a new $550 million(R 8.5bn) Matola LNG import terminal.

The Rompco pipeline, which connects Sasol’s Tande and Temane fields in southern Mozambique, currently supplies the majority of South Africa’s gas needs.

According to the 2021 annual report of the domestic industry body IGUA, South Africa currently faces a gas supply shortfall of approximately 170 petajoules per year.