The Nigerian National Petroleum Company Limited (NNPC Ltd.) has commenced the shipment of Liquefied Natural Gas (LNG) to Japan and China on a Delivered Ex-Ship (DES) basis, marking a significant expansion in its global energy supply operations.
Mr. Olufemi Soneye, Chief Corporate Communications Officer at NNPC Ltd., announced the development, quoting Mr. Segun Dapo, Executive President of NNPC Ltd. Downstream, in a statement released in Abuja on Monday. Dapo highlighted that this move aligns with NNPC’s strategic vision to establish itself as a reliable global energy supplier.
Dapo explained that the DES system not only offers greater financial rewards but also allows NNPC Ltd. to make inroads into the downstream segment of the LNG sector. The DES arrangement requires the seller to handle the shipping and insurance of the goods until they reach the specified port, which, in this case, are ports in Japan and China. This method demands higher expertise and efficiency compared to the Free on Board (FOB) system traditionally used
NNPC Ltd. successfully delivered its first DES LNG cargo on June 27, 2024, using the 174,000m³ LNG vessel Grazyna Gesicka, to Futtsu, Japan. Following this, the company expanded its operations to China, delivering another LNG cargo on a DES basis.
Since its entry into LNG trading in 2021, with its first LNG cargo sale in November of that year, NNPC Ltd. has traded over 20 cargoes in the European and Asian markets on an FOB basis. The transition to DES is expected to help NNPC capture more market share, build in-house capacity, and increase global recognition of the NNPC brand.
The collaboration between NNPC LNG Ltd. and NNPC Shipping Ltd. has been pivotal in executing these DES deliveries, reinforcing NNPC Shipping Ltd.’s position as a world-class shipping provider in the LNG sector. Mr. Panos Gliatis, Managing Director of NNPC Shipping, emphasized that the company aims to develop a robust shipping portfolio, including owned vessels, to meet the needs of its sister companies and other clients with enhanced shipping flexibility.
Looking ahead, NNPC LNG Ltd., in partnership with NNPC Shipping Ltd., is scheduled to deliver at least two more LNG cargoes to the Asian market on a DES basis by November 2024. This continued expansion demonstrates NNPC Ltd.’s commitment to becoming a key player in the global energy market while enhancing its operational capabilities and market presence in Asia.
