Cape Town

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). 

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 said 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. 

Sangqu said the initiative positions Transnet as a key player in South Africa’s nascent LNG market.

Sangqu said with the LNG Import Terminal expected to generate approximately 1 000 jobs and additional opportunities emerging during the construction of berth 207 and the necessary pipeline infrastructure, they are committed to building a sustainable workforce for the future.

In his remarks, Tshokolo Nchocho, TNPA Board Chairperson, said the agreements mark significant progress in advancing the country's energy security, economic growth and the transformation of our port infrastructure.

“The establishment of South Africa’s first LNG Import Terminal represents a strategic response to our nation’s energy challenges,” Nchocho said.

Nchocho said the establishment of South Africa’s first LNG Import Terminal represents a strategic response to the nation’s energy challenges.

“By securing a stable and diversified energy supply, we are ensuring that our industries and communities have the power they need to thrive. 

“By modernising existing infrastructure, this project not only enhances maritime fuel services but also plays a critical role in supporting global shipping operations, ensuring efficiency and competitiveness in an evolving energy landscape,” he said.

KwaZulu-Natal Premier Thami Ntuli hailed the signing of the two multibillion rand Terminal Operator Agreements (TOA), saying they will advance South Africa’s energy and maritime sectors and help grow the country’s economy and spur the creation of much-needed jobs.

“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 said the signing ceremony aligns quite solidly with the DMRE’s Strategic Plan (2020-25) that charts ambitions to become a country that is not only energy secure, but one that is unrolling a decarbonisation strategy, as the country steadily transitions 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.

Ntuli said the country has learnt that gas can negate pollution output from other fossil fuel sources and at the same time, halve the carbon emissions.

“These two agreements are welcomed, as they are the fruit born out of the Zululand Energy Terminal (ZET), a strategic partnership between Vopak Terminal Durban (PTY) Ltd and Transnet Pipelines to develop, construct and operate a new Liquefied Natural Gas (LNG) Terminal in Richards Bay,” the Premier said.

Ntuli said one of the most pleasing aspects of the agreement is expected to generate significant employment opportunities, while also fostering skills development and driving transformation in the maritime and energy sectors.

“In this regard, the projects are expected to generate approximately 1 000 jobs, with additional opportunities created during the construction of berth 207 and pipelines,” he said.

Acting TNPA Chief Executive, Phyllis Difeto, said this milestone underscores the commitment to transforming the country’s logistics sector and being responsive to national energy goals.

Difeto said collectively, the projects contribute to the economic resilience of the uMhlathuze region, with significant job creation in construction, operations and port-related industries.

“These initiatives highlight our commitment to transformation and workforce empowerment,” she said.

The signing of the agreements aligns with Transnet’s strategic pursuit of partnerships with the private sector and signifies a leap towards delivering Transnet's objectives to align its freight logistics business with key commodities of the South African economy.

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 thorough evaluation process in compliance with Section 56 of the National Ports Act (Act No. 12 of 2005), 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.

The initiative supports the Gas to Power Programme of South Africa, aligning with the Department of Mineral Resources and Energy’s Strategic Plan (2020-25) to enhance energy security and transition to cleaner energy sources.

TNPA has also finalised a 25-year concession TOA with FFS Tank Terminals for the development and operation of a liquid bulk terminal specialising in bunker fuels at the Port of Richards Bay.

The facility, located at the former Engen bunker terminal, will focus on enhancing the port’s capacity for handling liquid bulk and fostering economic growth.

TNPA is responsible for the safe, effective, and efficient economic functioning of the national port system, which it manages in a landlord capacity. 

It provides port infrastructure and marine services at the eight commercial seaports in South Africa in the cities of Richards Bay, Durban, Saldanha, Cape Town, Port Elizabeth, East London, Mossel Bay and Ngqura. It operates within a legislative and regulatory environment and is governed by the National Ports Act (Act No. 12 of 2005). 

The development of these two terminals is a game changer in the economic landscape of the region. 

The LNG terminal alone is projected to create over 1,000 job opportunities during construction, operations including downstream business for communities surrounding the uMhlathuze region, while the bunkering services terminal aims to generate around 50 direct and indirect jobs from the project initiation phase. – SAnews.gov.za

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