South Africa has proposed a major trade agreement with the United States. This agreement includes the purchase of US liquefied natural gas (LNG) for an estimated value of between 9 billion and 12 billion USD over ten years. This contract provides for the annual import of 75 to 100 petajoules (PJ) of LNG, or approximately 75 to 100 million cubic meters per year, over a ten-year period.
Stabilizing the South African Energy Sector
This agreement aims to stabilize the South African energy sector, which is facing electricity shortages and a current dependence on the Mozambique gas pipeline, whose reserves could soon be depleted. At the same time, the United States is committed to investing in South African gas infrastructure, particularly in key technologies such as hydraulic fracturing, in order to develop local gas production.
Securing Trade Advantages
In return, South Africa is seeking significant trade advantages in the US market. It is proposing an annual export quota of 40,000 vehicles to the US, exempt from customs duties, as well as exemptions on 385,000 tons of steel and 132,000 tons of aluminum exported to the country. These measures aim to protect and boost South Africa’s industrial sector, particularly the automotive sector, which is threatened by recently imposed US tariffs.
Strengthening trade relations between the two countries
The agreement is part of a broader effort to strengthen trade relations between the two countries. This agreement follows tensions and negotiations between South African President Cyril Ramaphosa and US President Donald Trump, notably during a meeting in Washington on May 21, 2025. This initiative also aims to reduce South Africa’s trade deficit with the United States and revive bilateral trade within a more favorable framework.
In summary, South Africa is proposing to import liquefied natural gas from the United States to secure its energy supply. In exchange, it is requesting preferential access to the US market for its automotive, steel, and aluminum exports, as part of a ten-year trade agreement.
