TNPA signs R1.4bn Durban LPG Terminal deal to boost gas supply

Transnet National Ports Authority (TNPA) has signed a landmark 25-year concession agreement worth R1.4 billion with WASAA CEF SOC Ltd to develop and operate a new liquefied petroleum gas (LPG) terminal at the Port of Durban’s Island View Precinct.

TNPA on Friday said the project is a critical step in advancing South Africa’s Just Energy Transition, supporting the shift in the gas sector towards cleaner energy sources while contributing to the decarbonisation of key industries.

The agreement will enable the development of a 50 000m³ LPG storage and handling terminal, aimed at meeting growing demand, particularly in KwaZulu-Natal and the Eastern Cape hinterland.

The terminal, which is expected to be completed by 2027, will have the capacity to dispatch up to 800m³ per hour of heated LPG mix.

Chairperson of the TNPA Board, Tshokolo Petrus Nchocho, said the signing marked the culmination of a lengthy and rigorous process that began in July 2024, when TNPA issued an award letter for the 25-year concession covering the design, development, financing, construction, operation, maintenance and eventual transfer of the LPG terminal.

“A rigorous journey has brought us to this long-awaited and proud moment. I am immensely proud of the teams that have contributed their expertise to this transaction,” he said.

Nchocho added that the Terminal Operator Agreement reflects a partnership aligned with national development priorities, market demand and global energy trends.

“The development of the first LPG terminal in the Port of Durban is a timely and necessary response to where the world is moving.”

“The WASAA CEF Joint Venture brings together a level 1 black-owned and black-women-led entity with a national energy institution that carries a mandate to support security of supply and long-term energy development.”

Founder and managing director of WASAA, Nokwanele Qonde, said the Island View LPG terminal, to be known as the LOT 100 Terminal, marks a significant milestone for the company and is the culmination of extensive work undertaken behind the scenes.

Qonde said the strategic project positions WASAA to play a meaningful role in the petrochemicals sector while supporting South Africa’s clean energy objectives.

“This strategic project places us in a prime position to play a meaningful role in the petrochemicals sector and ensure that we build the requisite infrastructure and capacity to facilitate the clean cooking agenda, alleviate the pressure on electricity through thermal heating applications while transitioning to just and clean energy for commercial and industrial markets,” Qonde said.

She added that the LOT 100 Terminal would help revitalise Durban as a major gas import hub while strengthening WASAA’s infrastructure footprint.

“We are also augmenting our capacity and beefing up our infrastructure network to ensure that LPG is firmly positioned as a viable energy source in the energy mix, and WASAA as the preferred gas provider,” she said.

Qonde noted that the backing of the Development Bank of Southern Africa (DBSA) significantly enhances the credibility of the project.

“With the DBSA in our corner, we are confident that the project will attract the requisite investment. We are looking forward to this exciting chapter that will take WASAA to the next level.”

Transnet Group CEO, Michelle Phillips, said the signing of the agreement between TNPA and the preferred bidder comes at a critical time as South Africa implements strategies to advance the Just Energy Transition.

She said the framework is guiding the country’s shift from fossil fuels to cleaner energy sources while accelerating the decarbonisation of key sectors.

“At Transnet, we have been very clear about the direction in which we are steering the organisation. We are building a business that is stronger, more resilient, and fundamentally more capable of supporting national growth,” Phillips said.

eThekwini Mayor Cyril Xaba, who also attended the signing ceremony, said the project would support the municipality’s plans to expand electricity generation capacity.

He noted that the Minister of Electricity and Energy has authorised the city to procure 400MW of renewable energy from independent power producers, comprising 300MW of gas-to-power and 100MW of solar photovoltaic generation.

“The timing of this project could not be more fitting,” Xaba said.

BUSINESS REPORT