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    Transnet to construct east South African LNG terminal by 2026


South Africa faces a 170 petajoules/year shortfall of natural gas supply as it looks to wind down coal-fired power plants.

by: Callum Cyrus

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Natural Gas & LNG News, Africa, Liquefied Natural Gas (LNG), LNG Condensed, Corporate, Import/Export, Political, Supply/Demand, News By Country, South Africa

Transnet to construct east South African LNG terminal by 2026

South Africa's Transnet National Ports Authority (TNPA) said April 24 it was inviting contractors for proposals for its LNG terminal in Richards Bay, aiming to complete the facility in just under four years' time, Reuters reported April 25.

TNPA is a subsidiary of South African state-owned freight logistics company Transnet. It expects to begin receiving proposal requests within weeks for the LNG terminal's design, building, finance and operation.

The first tender stage - the request for information phase - saw submissions from 19 companies, from major gas developers and infrastructure operators across America, Asia, Europe and the Middle East.

South Africa is shifting from coal-fired power stations to cleaner sources like natural gas to underpin its industrialised economy. Its existing gas supply shortfall was estimated at 170 petajoules/year in 2021, according to IGUA's 2021 annual report, which blamed slow decision-making and barriers to development and infrastructure.

IGUA estimates that natural gas demand growth South Africa would range from 7% to 14% annually if it was not for the supply shortfall, driven by increased consumption in the chemical, power and industrial sectors.

Richards Bay's port lies between Durban and South Africa's border with Mozambique in KwaZulu-Natal province. It is just one option being progressed to meet South African gas needs.

Total's bid to build a $20bn LNG development in northern Mozambique was derailed due to insurgent violence, but the country's upstream sector still holds 2.6 trillion ft3 of proven gas reserves in Inhambane province alone and already supplies most South African gas consumption.

South Africa's Sasol already operates Mozambique's two main gas fields at Tande and Temane, and the country's first LNG production and export facility - the Area 4 Coral-Sul floating LNG project - saw its core FLNG vessels sail away in November 2021. Galp, ExxonMobil, CNPC, Kogas and KNH have all backed the Area 4 Coral-Sul project.

A $550mn LNG terminal in Mozambique's capital Maputo, Matola LNG, could be ready to provide LNG to South Africa by 2025, if investors TotalEnergies and Gigajoule close on the necessary financing agreements.

Captain Dennis Mqadi, the port manager at Richards Bay, said: "TNPA is accelerating the implementation of this project to assist with the country's energy needs and ensure that it provides the transition energy required toward South Africa's decarbonisation."