Faith Nyasuguta
In a strategic move to bolster its energy security and mend strained ties with the United States, South Africa has proposed a decade-long agreement to import liquefied natural gas (LNG) from the US. The proposed deal, unveiled during President Cyril Ramaphosa’s recent visit to Washington, aims to import between 75 to 100 petajoules of LNG annually, translating to approximately $900 million to $1.2 billion in trade per year, or up to $12 billion over ten years .
The initiative, detailed in a ministerial statement by Khumbudzo Ntshavheni, Minister in the Presidency, is part of a broader strategy to stabilize South Africa’s energy supply while reinforcing its role as a strategic trade partner. The country is seeking to transition from coal to natural gas, especially as gas supplies from Mozambique diminish .
Beyond energy imports, the proposal includes requests for duty-free access for 40,000 vehicles annually and related automotive components, as well as quotas allowing 385 million kilograms of steel and 132 million kilograms of aluminium to enter the U.S. market without tariffs .
These concessions are vital for South Africa’s automotive and manufacturing sectors, which have been impacted by recent U.S. tariffs and the potential expiration of the African Growth and Opportunity Act (AGOA) .
The proposed deal also emphasizes collaboration on energy technologies, particularly fracking, to help unlock South Africa’s untapped natural gas reserves. This technological cooperation could enhance South Africa’s domestic energy production capabilities and reduce reliance on external sources .
The United States, already the world’s largest exporter of LNG, is expanding its global energy reach. In March 2024, the U.S. exported a record 9.3 million metric tons of LNG, driven by increased production capacities . South Africa’s move to engage with the U.S. for LNG imports aligns with this expansion and represents a significant shift in its energy procurement strategy.
This proposal comes at a time when South Africa is seeking to reset its relationship with the U.S, which has been strained due to various diplomatic tensions and trade disputes. By offering a substantial LNG import deal and seeking mutual economic benefits, South Africa aims to foster a more robust and cooperative bilateral relationship.
As discussions progress, the success of this proposed agreement will depend on negotiations addressing both countries’ economic interests and strategic priorities. If finalized, the deal could mark a new chapter in U.S.-South Africa relations, characterized by increased energy cooperation and strengthened trade ties.
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