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Transnet announced on Tuesday afternoon that it had signed a cost sharing deal with the International Finance Corporation to fund investment into natural gas infrastructure.
The freight utility said in a statement that it would partner with the World Bank Group member to conclude a feasibility study for a liquefied natural gas storage and "re-gasification" terminal in Richards Bay, KwaZulu Natal.
According to the statement, the competitive process for partner selection will commence after Transnet has approved the natural gas network investment case and received the required regulatory approvals from government.
"IFC has committed $2m as part of the cost-sharing agreement. This will help Transnet conclude the feasibility study, establish the special purpose vehicle, and inform the market of the transparent and public process to select the private investor," the statement said.
The statement added that the cost-sharing agreement would allow the parties to leverage on Transnet's existing infrastructure and IFC's track record of providing innovative advisory for infrastructure projects that improve access to energy.
"This ground-breaking initiative is intended to unlock a backbone of the country’s natural gas network infrastructure to serve existing and growing gas markets, consisting largely of industrial and commercial off-takers located in KwaZulu-Natal, Mpumalanga, Free State and Gauteng provinces," said the statement.
The statement said the Richards Bay natural gas network project would complement the delivery of liquefied natural gas to new markets in the Eastern Cape and Western Cape through the ports of Ngqura and Saldanha Bay respectively, and support government’s future gas-to-power projects.
