South Africa has proposed a long-term deal to buy liquefied natural gas (LNG) from the United States. The plan covers a 10-year period, aiming to secure a trade agreement with the Trump administration, according to a South African government statement.
The country intends to import between 75 and 100 million cubic meters of LNG annually from the U.S., the world’s largest LNG exporter. Khumbudzo Ntshavheni, South Africa’s Minister in the Presidency, said the deal could unlock $900 million to $1.2 billion in trade each year. Over ten years, this could total $9 billion to $12 billion, depending on prices.
Ntshavheni emphasized that U.S. LNG imports will not replace South Africa’s current gas supplies. Instead, they will add to the existing energy sources. She also noted that South Africa would explore cooperation with the U.S. in technologies like fracking to develop its own gas resources.
South Africa’s Karoo region has significant shale gas reserves. However, exploration is currently banned due to environmental concerns. The proposed trade package also includes other benefits, such as duty-free export of 40,000 vehicles annually from South Africa to the U.S. It also covers duty-free imports of automotive parts, 385 million kilograms of steel, and 132 million kilograms of aluminum per year.
The LNG proposal was reportedly put forward by President Cyril Ramaphosa during his recent visit to the White House. The meeting was tense, as U.S. President Donald Trump accused Ramaphosa of “genocide” against white farmers and criticized policies like black economic empowerment and land reform.
Ramaphosa had hoped to improve relations with the Trump administration after it cut aid to South Africa, citing “egregious actions.” South African-born billionaire Elon Musk, a known Trump supporter, has criticized South Africa’s government for “openly racist policies.” Musk’s stance is believed to have influenced the U.S. administration’s tough approach. White South Africans control a disproportionate share of land and wealth, despite being only 7% of the population.
In March, U.S. Secretary of State Marco Rubio expelled South Africa’s ambassador to the U.S., Ebrahim Rasool, declaring him persona non grata. The U.S. has also criticized South Africa’s legal case against Israel at the International Court.
Currently, South Africa imports most of its gas from Mozambique through a pipeline. Mozambique’s $20 billion natural gas and LNG project has faced delays due to violence in the Cabo Delgado region, where Islamic State-linked militants attacked in 2021. TotalEnergies is seeking government approval to lift the force majeure on the project, aiming to start production by 2029.
TotalEnergies holds a 26.5% stake in the project, Japan’s Mitsui & Co owns 20%, and Mozambique’s state-owned ENH has 15%. Despite challenges, the project remains vital for Mozambique’s economy. The country expects to earn $23 billion over 30 years from the Coral Norte LNG project, which will produce 13.12 million metric tons of LNG per year.
Across Africa, 18 countries produce natural gas. However, Algeria, Egypt, and Nigeria produce nearly 90% of the continent’s total. Nigeria has the largest gas reserves in Africa, with 206.5 trillion cubic feet. Its oil and gas sector contributes 95% of foreign exchange earnings and 20% of GDP.
Several large LNG projects are underway or awaiting final investment decisions in Africa. These include Rovuma LNG, Coral North FLNG, Mozambique LNG, and Tanzania LNG. These projects will increase Africa’s LNG export capacity over the next decade.
The Coral South FLNG facility, located offshore Mozambique, is the first floating LNG plant in deep African waters. It will process 450 billion cubic meters of gas annually, liquefying 3.4 million metric tons for export. Rovuma LNG plans 12 processing trains with a total capacity of 18 million metric tons per year. Mozambique LNG aims for 43 million metric tons annually, while Tanzania LNG will add 10 million metric tons per year.
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