South Africa Energy Natural Gas Infrastructure Opportunities

South Africa’s push for natural gas as a key driver of economic growth and power generation is creating significant opportunities for U.S. companies in LNG infrastructure and related technologies. The country aims to secure approximately 300 petajoules of gas demand annually for power generation and industrial use, presenting a substantial market for U.S. exporters.
Key opportunities include:

1.    LNG Import Terminals: Two major projects are planned:
          •    Richards Bay terminal (Kwa Zulu Natal Province): Phase 1 includes a 135,000m3 Floating Storage Unit and 2 mtpa onshore regasification                 system. Phase 2 adds a 200,000m3 onshore LNG tank and additional regasification capacity.
          •    Ngqura terminal (Eastern Cape Province): Phase 1 features a Floating Storage and Regasification Unit delivering 0.5 million tons of LNG                   per year. Phase 2 includes an onshore regasification facility.
2.    Gas-to-Power Plants: Eskom is planning a 3 GW plant near Richards Bay, targeting 2030 operations
3.    Pipeline Infrastructure: Upgrades and new construction to support gas distribution
4.    Technology and Services: LNG regasification equipment, gas turbines for power generation, emissions monitoring and control systems, and energy efficiency solutions for gas-powered industries

U.S. exporters should note that South Africa faces a potential gas supply shortage by 2027, driving urgency for infrastructure development. The government is actively seeking international partnerships for LNG supply and infrastructure projects. In September 2024 Eskom and Sasol signed an MOU to collaborate on exploring and researching potential future LNG requirements. The collaboration also aims to determine the potential volumes that South Africa requires to establish a viable LNG import market. In addition, environmental impact assessments and regulatory compliance are critical factors in project approval.

To capitalize on these opportunities, U.S. companies should:

•    Engage early with project developers and government stakeholders
•    Consider partnerships with local firms to navigate the market
•    Offer flexible financing options to accommodate project timelines
•    Demonstrate environmental and efficiency benefits of their technologies

For detailed information on South Africa’s natural gas sector opportunities and upcoming tenders, contact: Mpilo.Mahlangu@trade.gov