TRANSNET Pipelines (TPL) has asked Liquefied Natural Gas (LNG) customers to estimate their demand for the product to enable the state-owned entity to reserve pipeline capacity in the Lilly Pipeline which will be repurposed to connect a first-of-its-kind in the country LNG terminal at Richards Bay to the local market.

TPL has extended the deadline for interested parties to submit an Expression of Interest (EOI) which will help TPL assess market interest and demand and inform the pre-feasibility study and the future request for proposal (RFP) processes.

The new deadline for submissions is 30 October 2024. The extension allows global natural gas distribution companies time to research the South African market and form local alliances. It is envisaged that LNG will be imported through the Zululand Energy Terminal (ZET) being developed at Richards Bay and supplied to manufacturing facilities and gas-to-power stations.

TPL’s responses on the tender clarification register published online suggest that there is some confusion regarding the scope of the EOI. TPL says that the EOI is aimed at potential customers and not for Engineering, Procurement and Construction (EPC) or Management (EPCM).

In another response on the clarification register regarding the pre-feasibility study, TPL responded, “The project, titled the ‘Lilly Upgrade Program’ will follow TPL’s execution strategy where TPL inhouse resources will be complemented with specialist engineering and commercial service providers that will be procured through an open market tender process. TPL anticipates that this will be advertised within the next few weeks for the pre-feasibility phase of the program.”

TPL aims to transition the Lilly Gas Pipeline from transporting Methane Rich Gas (MRG) to regasified Liquefied Natural Gas (LNG). According to TPL, the Lilly Pipeline currently transports approximately 500 million cubic meters of MRG annually from Secunda via Empangeni to Durban, with key offtake points along the route.

“Transnet is committed to spearhead the development of the natural gas sector in South Africa. With the demand for natural gas expected to rise significantly, Transnet is proactively developing the LNG value chain to safeguard South Africa’s strategic interests. This initiative positions Transnet’s Natural Gas Networks business as a vital contributor to the country’s long-term economic growth and transformation,” said Transnet Pipelines chief executive, Sibongiseni Khathi.

The project entails:

Constructing an intake station near Empangeni to connect with the Zululand Energy Terminal (ZET) as the source point at the Port of Richards Bay.
Splitting the flow at Empangeni to allow bi-directional flow towards Durban and Secunda.
Debottlenecking and modelling the pipeline for maximum future capacity to meet market demand and secure commercial agreements.

On 9 January 2024, Transnet National Ports Authority (TNPA) appointed the Transnet Pipelines and Vopak Terminals Durban consortium to develop and operate the LNG terminal at the Port of Richards Bay, named the Zululand Energy Terminal (ZET).

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