The Vopak Terminal Durban & Transnet Pipelines (TPL) Consortium Venture will design, build, finance, and run the LNG terminal for 25 years, according to a statement last week. The terminal will be located in the South Dunes Precinct at the port, which is the largest in sub-Saharan Africa by volume. Transnet will invest in the common user port infrastructure, while the consortium will provide the terminal infrastructure.

The project will be the first of its kind in South Africa and will introduce an alternative source of energy as the country battles an energy crisis and transitions towards decarbonization, the statement said.

"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. This is a testament to our dedication to promoting economic activity, job creation, and sustainable energy solutions, " TNPA Managing Executive for the Eastern Region ports, Moshe Motlohi, said in the statement.

The consortium consists of Vopak, a major player in the oil and gas sector with a network of 78 terminals in 23 countries, and Transnet Pipelines, a South African public company that transports petroleum and gas products over varying distances. The project is in line with the government's plans to develop the gas market and support gas to-power generation targets.

The terminal is expected to start commercial operation in 2027, after the signing of the terminal operator agreement, which is currently under negotiation.

The project follows a tender process that Transnet initiated in 2019, when it entered into a cost-sharing agreement with the International Finance Corporation, a member of the World Bank Group, to conduct a feasibility study for the LNG terminal and the re-purposing of Transnet pipelines for natural gas transmission to inland markets. In early 2022, Transnet issued a request for information for the possible appointment of a terminal operator, which resulted in the selection of the Vopak-led consortium.

The Port of Richards Bay is one of three commercial seaports operated by Transnet that have been identified for LNG importation, along with Saldanha and Ngqura. Richards Bay is particularly strategic because of its proximity to major urban and industrial centers such as the Kwazulu Natal and Gauteng provinces. However, the LNG terminal there is expected to have industrial off-takers as anchor tenants for the gas, and not the power sector.

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