South Africa to build LNG import terminal

Thursday, 08 August 2019
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South African state-owned transport logistics company, Transnet has agreed a cost-sharing agreement with IFC, a member of the World Bank Group, to undertake a feasibility study for the development of a storage and regasification terminal at Richards Bay.

Transnet said that it had identified significant industrial demand for natural gas and opportunities to leverage its ports, pipelines and rail assets to facilitate private investment in gas infrastructure for South Africa.

This initiative is intended to unlock the country’s natural gas network infrastructure to serve existing and growing gas markets, mainly industrial and commercial off-takers located in KwaZulu-Natal, Mpumalanga, Free State and Gauteng provinces.

Its aim is to facilitate private sector investment and partnerships with other state-owned companies (SOCs) for the development of South Africa’s natural gas infrastructure. The Richards Bay Natural Gas Network (NGN) project will complement the delivery of LNG to new markets in the Eastern Cape and Western Cape provinces through the ports of Ngqura and Saldanha Bay, respectively, and will support government’s future gas-to-power projects.

The LNG terminal will be developed by private investors that will be selected through a competitive process to own a majority stake in a planned special purpose vehicle (SPV). Transnet and other SOCs will also participate in the SPV.

The facilities are expected to be operational by 2024.

The NGN project includes the Richards Bay LNG storage and regasification terminal, plans for the re-purposing of Transnet’s Lily Pipeline and Durban-Johannesburg Pipeline for the transmission of natural gas, and the establishment of virtual pipelines for LNG to be transported to various markets by rail and road by 2024, Transnet explained.

IFC has committed $2 mill as part of the cost-sharing agreement. 

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