South Africa fast-tracks $3 billion Durban LNG power plant

Global commodity trader Vitol is backing a consortium planning a $3 billion gas-fired power station and liquefied natural gas (LNG) import facility at Durban port on South Africa’s east coast. This comes as Vitol seeks a foothold in a market targeting 16 gigawatts of new gas generation by 2039.

ACWA, Vivo Energy, VTTI lead project

The consortium includes Saudi Arabia’s ACWA Power, Vitol unit Vivo Energy—which merged with Engen in 2024—and terminal operator VTTI. ACWA Power, already a major developer and investor in solar and hybrid power projects in South Africa, did not immediately respond to requests for comment.

The project, not previously reported, received Strategic Integrated Projects status from the government in September, officials said. This designation allows certain projects to bypass some licensing and regulatory steps, accelerating development timelines.

Pipeline, trucking, bunkering included

In a document submitted to South African lawmakers, Vivo Energy and Engen South Africa said they were “advancing the development and investment into a 1,000 to 1,800 MW combined-cycle gas turbine power plant with associated LNG import infrastructure.” The plan reserves 20 hectares of land at Durban’s marine terminal, but officials did not specify the project’s timeline, cost breakdown, or expected gas volumes.

The $3 billion project is intended not only for power generation. It would also provide regasified LNG distribution through the Lilly gas pipeline, connecting Secunda to Durban, LNG trucking to off-grid industrial and mining operations, and LNG bunkering for ships. Officials noted that sourcing LNG cargoes is still under review.

Why gas matters now

South Africa is looking to gas as a critical step away from coal, which supplies roughly 80 percent of the country’s electricity. The heavy reliance on coal has left the grid vulnerable, triggering frequent load-shedding events that cost the economy billions of dollars in lost productivity. Aging coal plants require 6 to 12 hours for cold startup, limiting flexibility during peak demand or renewable energy fluctuations.

Industries, particularly mining, have increasingly relied on expensive diesel backup systems, which cost three to five times more than grid power, directly affecting global competitiveness. Unreliable electricity supply has prompted industrial customers to explore alternative energy arrangements, putting long-term demand and revenue for the national utility under pressure.