Ambitious Transnet pipeline project to address SA’s future gas needs announced at AOW – Investing in African Energy

CAPE TOWN, 10 October, 2024 – With the energy transition well underway, and South Africa facing potential shortages in its gas supplies, South African transport parastatal Transnet is working on an ambitious project to meet the country’s gas needs.

The plan will see Transnet repurpose its pipeline infrastructure to be able to transport liquified natural gas (LNG) from the coast to South Africa’s major inland markets.

Transnet Pipelines CEO Sibongiseni Khathi outlined the plan during the AOW: Investing In African Energy event, being held in Cape Town this week.

The project will involve repurposing the existing Lilly Pipeline to transport LNG from the Richards Bay port to Secunda and Durban. The project is part of a wider strategy to develop, finance, construct and maintain LNG midstream infrastructure to enable South Africa to import LNG in the future.

This comes in the context of the global transition to cleaner fuels, as well as a decline in the volume of refined petroleum products being consumed in South Africa.

The Lilly Pipeline is currently optimised to transport methane-rich gas (MRG) from the Sasol plant in Secunda to Richards Bay. The proposed plan will reverse the flow, to transport LNG to Secunda, and in this way, to meet the energy needs of several current gas off-takers.

“Transnet Pipeline is following a range of strategies to ensure security of energy supply to the inland market,” said Khathi, presenting the plan at AOW. “We also need to support the energy transition going forward, and the Lilly Pipeline repurposing is in line with this strategy.”

The Lilly Pipeline currently transports approximately 500 million cubic metres of MRG annually from Secunda via Empangeni to Durban, with key offtake points along the route.

MRG is primarily used to power heavy industries such as aluminium smelters, tiling, mining, brick-making, paper production and steel manufacturing.

The new project entails constructing an intake station near Empangeni to connect with the new Zululand Energy Terminal (ZET) as the source point for the Port of Richards Bay and splitting the flow at Empangeni to allow bi-directional flow towards Durban and Secunda.

It also includes the debottlenecking and modelling to ensure maximum future capacity to meet market demand and secure commercial agreements.

The plan is also a strategy to address the looming “gas cliff” facing South Africa, with the country’s supplies from the Pande-Temane gas fields in Mozambique set to end as the fields reach end-of-life.

“With the prospect of the gas cliff, there is a drive from every corner to try to get new gas supplies online as quickly as possible,” said Khathi. “The schedule is for Phase 1 of the terminal to be completed by Q1 2028, but work is being done to try to bring that forward to early 2027.”

Khathi says that for the Richards Bay terminal to be viable, it also needs to incorporate a gas-to-power solution. Phase 2 of the project would see the terminal expand from a capacity of about two million tons per annum to around five million tons.

“We are extremely excited about this project, which will be the project that will bring gas into the South African market at scale,” said Khathi. “If everything goes to plan, we could see gas flowing into the country by 2028. Ultimately, it represents a clear strategy to meet the country’s current gas needs, and even to significantly expand our consumption as part of the energy transition.”

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