Dutch tank storage and terminal operator Royal Vopak has postponed a final investment decision (FID) on South Africa’s first liquefied natural gas (LNG) terminal to 2028, a senior executive said on Wednesday.
The company had initially planned to approve the project earlier this year. However, a September court order stopped power utility Eskom from proceeding with plans to develop a 3,000-megawatt gas-fired power plant at Richards Bay, delaying momentum on the LNG project.
“We were waiting to see what was happening with Eskom and we just extended our pre-FEED study,” Oliver Naidu, president of Vopak’s local unit, told Reuters on the sidelines of an energy conference, referring to the early front-end engineering and design phase.
Naidu said the company now expects to be in a position to make a final investment decision in the first quarter of 2028. The two-phase project is estimated to cost about $1 billion.
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Vopak was selected in 2024 as part of a consortium with Transnet Pipelines to build and operate the Zululand Energy terminal at Richards Bay port for 25 years.
Naidu added that the consortium expects to sign preliminary agreements in the coming months with Eskom and potentially U.S. oil major Exxon Mobil for LNG supply and distribution.
Exxon is considered one of the leading potential customers, he said. ExxonMobil, a global LNG supplier, has previously identified South Africa as a priority market. The company did not immediately respond to a request for comment.
The Zululand Energy terminal, located on South Africa’s east coast, was expected to begin by importing 2 million tonnes per annum (mtpa) of LNG by 2027 before increasing capacity to 5 mtpa, according to previous statements from the Transnet National Ports Authority.
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Image Credit: Reuters
