Eskom and Zululand Energy Terminal (ZET) have signed a heads of agreement (HoA) establishing a framework for collaboration on a planned 3GW gas-to-power development in South Africa.

Under the agreement, Eskom will be the ‘foundation customer’ at the proposed Zululand Energy Terminal.

It is set to provide open access to liquefied natural gas (LNG) import, storage and regasification infrastructure supporting Eskom’s planned generation capacity.

The planned project will be based in the Richards Bay Industrial Development Zone in KwaZulu-Natal.

Zululand Energy Terminal director and project owner Oliver Naidu said: “Today’s signing marks a significant milestone for ZET as we advance our role in supporting South Africa’s energy future.

“As one of our anchor customers, Eskom’s participation demonstrates growing confidence in LNG as an enabler of energy security, grid stability and industrial growth.”

The LNG terminal is being led by ZET, a joint venture between Vopak Terminal Durban (owned by Royal Vopak of the Netherlands and South Africa’s Reatile Group Proprietary Limited) and Transnet Pipelines, a division of Transnet SOC.

The terminal was granted a concession by the Transnet National Ports Authority to develop, operate and maintain the facility.

Eskom group CEO Dan Marokane said: “Gas is being used as a bridge fuel to support the transition to a low-carbon energy system.

“These gas plants are designed to complement intermittent renewable sources like solar and wind, ensuring reliable 24/7 power, while clean energy technologies are being developed and introduced onto the grid.

“The availability of dispatchable power is at the very heart of the energy transition and industry cannot operate without it as it forms the backbone for renewable energy integration into the grid.”

Eskom and ZET have agreed to seek the required regulatory approvals, finalise commercial terms and move forward with the infrastructure needed for the project. The agreement is supported by South Africa’s Ministry of Electricity and Energy, the Ministry of Transport and Transnet.

According to Eskom, the power plant will use regasified LNG as its primary fuel source and is designed for a 25-year life cycle, operating mainly as a mid-merit plant.

The project is designated as a Strategic Integrated Project under the Infrastructure Development Act 23 of 2014 and is incorporated in the Integrated Resource Plan (IRP) 2025.

Development will follow a private sector participation model, leveraging strategic partnerships, project financing and long-term power offtake agreements.

The IRP 2025 sets a target for 6GW of gas-fired power by 2030, split between private producers and Eskom.

The partners state that the initiative aims to reinforce energy supply security, aid the transition to renewable sources, and reduce dependence on diesel and coal.

Eskom highlights that the use of gas will also support overall grid stability and broader industrialisation.