ExxonMobil Signs LNG Supply Deal Backing South Africa's First Import Terminal
The preliminary agreement with Zululand Energy Terminal adds a new Southern African buyer just as Mozambique's cost dispute with TotalEnergies stays unresolved.
ExxonMobil signed a preliminary agreement to supply liquefied natural gas to the Zululand Energy Terminal at Richards Bay, advancing what would become South Africa's first LNG import facility.4,5
The $1 billion project will underpin a 3,000-MW gas-fired power plant and could evolve into a regional supply hub serving countries including Zimbabwe, according to the companies.3
The supply heads of agreement, signed by ZET Director Oliver Naidu and Andrew Barry of ExxonMobil LNG Market Development Inc., is a preliminary commitment, not a binding offtake contract.5 The project has also invited expressions of interest from co-investors, Gasworld reported, suggesting the commercial structure is still taking shape.6
ExxonMobil's push into Southern Africa fits a broader portfolio logic. The supermajor said on Friday (2026-07-31) that its pipeline of LNG projects would diversify production away from the Middle East, though the company said it remains committed to that region given its long-term importance to global energy markets and would not shy away from opportunities there.7
The Richards Bay deal takes on more weight given events further up the coast. Mozambique's government has disputed TotalEnergies' estimate that the years-long delay in the Mozambique LNG project has cost the French major and its partners $2 billion in overruns, a source familiar with the matter told Bloomberg.1
The two sides continue discussions on costs and the overall plan, and a resolution is still possible, Bloomberg's source said.1 But the disagreement has been public long enough to complicate Mozambique's efforts to attract additional project partners. A contested cost figure with no agreed resolution gives potential co-investors no baseline for their own exposure.
Mozambique holds significant gas reserves. Its problem is time. The longer the TotalEnergies dispute drags, the more the market fills with committed supply. Cheniere Energy, which became the first US LNG exporter in 2016 and has invested more than $50 billion across two Gulf Coast facilities, sells roughly 90% of its LNG under long-term, fixed-fee contracts to utilities and other buyers.2 Cheniere plans to deploy more than $25 billion in available cash toward growth, buybacks and dividends through 2030.2 That is the competitive bar Mozambique's sponsors are trying to clear.
Asian spot prices offer some support to producers willing to commit capital. JKM stood at $21.88/MMBtu at 08:51 UTC on 2026-08-19, while ICE Brent crude front-month held at $91.30 a barrel at the same timestamp. ICE Endex TTF front-month was at €63.62/MWh at 08:15 UTC on 2026-08-19. Those levels support new supply investment in principle, but individual project economics still hinge on resolved contracts and agreed cost structures.
The ZET terminal, if it reaches final investment decision, would create a new import point in Southern Africa — one that could eventually draw cargoes from Mozambique if and when its projects reach production. That link between the two countries' LNG trajectories is real, but its value depends on Mozambique resolving the dispute with TotalEnergies and showing a credible construction timeline.1
The next concrete signal from Maputo will come from the cost negotiations. Until TotalEnergies and the government of Mozambique agree on a number, the project's sponsors cannot close the gap between what the French major says it is owed and what Mozambique is prepared to accept.1