CAPE TOWN, June 17 – ExxonMobil has signed a preliminary agreement to supply liquefied natural gas (LNG) to South Africa’s planned Zululand Energy Terminal, marking a significant step in the country’s efforts to diversify its energy mix and reduce reliance on coal-fired electricity generation.
The agreement will support the development of the Zululand Energy Terminal (ZET), which is expected to become South Africa’s first LNG import facility once construction is completed.
Located at Richards Bay on South Africa’s east coast, the terminal is expected to play a central role in establishing a domestic LNG market and supporting the country’s long-term energy security strategy.
The deal follows months of discussions between the two parties and comes as South Africa accelerates efforts to introduce natural gas as a transition fuel within its evolving energy landscape.
According to ZET Director Oliver Naidu, ExxonMobil’s participation reinforces the strategic importance of Richards Bay as a future gateway for LNG imports and strengthens plans to create a competitive and sustainable gas market.
South Africa currently relies heavily on coal for electricity generation, with coal-fired power stations accounting for the majority of the country’s power supply.
However, policymakers are increasingly turning to natural gas as part of broader efforts to diversify energy sources, improve grid reliability and support decarbonization objectives.
ExxonMobil said South Africa has been identified as a priority growth market within its global LNG strategy.
The company is seeking to expand its global LNG supply portfolio to more than 40 million metric tons annually by 2030 as demand for cleaner-burning fuels continues to grow.
“This agreement reflects ExxonMobil’s global LNG experience and our commitment to support South Africa’s energy security with reliable supply,” said Andrew Barry, Chairman of ExxonMobil LNG Market Development Inc.
The agreement also complements recent developments in South Africa’s power sector.
Earlier this month, Eskom signed a long-term LNG agreement with the Zululand Energy Terminal to support a planned 3,000-megawatt gas-to-power project.
The proposed power plant is expected to use regasified LNG supplied through the terminal as its primary fuel source over its operational lifespan.
South Africa has allocated approximately 6,000 megawatts of gas-fired generation capacity within its long-term energy plan, reflecting the growing role of natural gas in the country’s future electricity mix.
Industry observers view the ExxonMobil agreement as a major milestone in South Africa’s efforts to build LNG infrastructure, attract private-sector investment and strengthen energy security while supporting a gradual transition away from coal dependence.
