Dawn of a new era for South Africa’s biggest transport company

The Transnet National Ports Authority (TNPA) has signed an agreement with the South African energy infrastructure project Ukwanda LNG (liquefied natural gas) to build and operate a regasification facility at the Port of Ngqura.

The project, which is valued at around R22 billion, will run for the next 25 years, despite full operations only expected to be in place by 2035.

Aimed at strengthening the country’s energy security by advancing the gas infrastructure needed to help stabilise the local electricity supply, it will also support long-term energy security in South Africa.

The development has been designated a national Strategic Integrated Project, under which the TNPA will construct a dedicated LNG berth valued at R2 billion.

At the same time, Transnet will develop an onshore LNG regasification facility at the deepwater Port of Ngqura.

Used as an alternative energy source, LNG is natural gas (predominantly methane) that has been super-cooled, converting it into a liquid for easier storage and transport.

A regasification facility, like the one being developed by Transnet, converts the fuel back into a gaseous state so it can be distributed through pipelines to power plants, industries, and homes.

The company confirmed last week that this development is a direct response to South Africa’s Just Energy Transition Programme, which aims to unlock a planned 6,000 MW gas-to-power pipeline.

It added that the LNG facility will support critical fuel infrastructure, a 3,000 MW gas-to-power allocation, providing lower-carbon baseload electricity to accompany the country’s growing renewable energy sources.

The project includes the establishment of a temporary floating unit, which will be moored at the port to receive LNG, store the liquid gas and convert it back into a high-pressure gaseous state

It also includes the construction of permanent onshore infrastructure to supply gas to off-takers, industry, data centres and independent power producers.

This will enable the generation of about 3,500MW of electricity within the Coega Special Economic Zone (SEZ).

Reinventing Transnet to achieve growth

Transnet’s initiative aligns with its ongoing operational recovery and what it has called its “Reinvent for Growth” infrastructure-led growth strategy.

Through its public-private partnership, the TNPA will continue to leverage collaboration to modernise infrastructure at its ports, while simultaneously advancing South Africa’s development priorities.

Transnet Group Chief Executive Michelle Phillips said the milestone agreement represents a profound shift in how South Africa uses its commercial seaports to support national energy security.

“By formalising this terminal operator agreement, TNPA is not only executing its landlord mandate, but also building the foundational infrastructure needed to support industrial growth and deliver reliable, lower-carbon energy to the national grid,” she said.

The construction of the LNG regasification facility and its offshore floating unit is expected to be completed within 36 months and create more than 500 jobs during construction, as well as 50 permanent positions following its conclusion.

Representing the Ukwanda LNG project, Professor Anna Mokgokong, Chairperson of Tamasa Energy Group, said the signing of the agreement was more than a procedural step.

She noted that it reflects a long-term conviction, disciplined effort and a shared belief in the strategic value of the project for South Africa’s energy future, logistics capability and economic development.

“For the Eastern Cape, this project represents infrastructure that can unlock jobs, skills development, local participation and renewed economic momentum, while supporting energy security and South Africa’s broader transition to a more diversified, lower-carbon energy mix,” she said.