Sullivan, who held at least a piece of the lead after rounds one and two, struggled to a 1-over 73 in the third round.
The second round was completed earlier Saturday after fog forced the suspension of play on Friday. Sullivan finished round two at minus-10, one stroke clear of John Bickerton and David Higgins.
Gary Orr and Robert-Jan Derksen share third place at 8-under-par 208.
Higgins and Bickerton each struggled to rounds of 2-over 74. They were joined in a tie for fifth place at minus-7 by Van Phillips (70) and Stephen Scahill (72).
McLardy was steady to open his round as he parred the first four holes. He moved into red figures with a birdie at the par-4 fifth. He picked up birdies at the seventh and ninth to make the turn at minus-9.
Around the turn, McLardy bogeyed the par-4 10th for the second straight round. However, he bounced right back with a birdie on the 11th to return to 9 under. The South African closed his round with seven straight pars to grab a share of the lead.
Sullivan struggled to start his round. He dropped shots at two and six to fall to minus-8. He rebounded with a birdie on the seventh at Santo da Serra Golf Club, but faltered at the next to another bogey.
The 28-year-old got back to minus-9 with a birdie at the par-4 10th. Sullivan tripped to his fourth bogey of the day at the par-5 11th. He then moved back into a tie for the lead when he birdied the par-3 15th. He parred his last three holes to remain there.
Markus Brier fired a 4-under 68 Saturday. He moved to 6-under-par 210 and was joined in a tie for ninth by Mikko Ilonen, Miguel Angel Martin, Rolf Muntz and Simon Wakefield.
Tom Whitehouse and Andrew Coltart are one stroke further back at minus-5.