By Aypmide Otitoju
The Nigerian National Petroleum Company Limited (NNPC) has commenced the shipment of Liquefied Natural Gas (LNG) cargoes to Japan and China under a Delivered Ex-Ship (DES) arrangement. This strategic move aligns with NNPC’s vision to establish itself as a dynamic and reliable global energy supplier.
In a statement released on Monday, NNPC’s spokesperson, Olufemi Soneye, highlighted the company’s milestone achievement, made possible through the collaboration of two of its downstream subsidiaries—NNPC LNG Ltd and NNPC Shipping Ltd. The first DES LNG cargo, carried by the 174,000m³ vessel Grazyna Gesicka, was successfully delivered to Futtsu, Japan, on June 27, 2024.
“Following this successful delivery, NNPC has expanded its footprint to China, where it has completed the delivery of another LNG cargo on a DES basis,” Soneye stated.
The Delivered Ex-Ship (DES) model is an international trade term where the seller is responsible for delivering goods to a specified port, including covering shipping and insurance costs until the goods reach the destination. This system requires a higher level of expertise and operational efficiency compared to the more commonly used Free on Board (FOB) system.
NNPC Ltd has been involved in LNG trading since 2021, with its first LNG cargo sale occurring in November of that year. Since then, the company has traded over 20 cargoes in the European and Asian markets on an FOB basis.
Commenting on the recent developments, the Executive Vice President, Downstream, Dapo Segun, emphasized the benefits of the DES system. “The DES system is not only more financially rewarding but also allows NNPC Ltd to penetrate deeper into the downstream segment of the LNG sector. It positions NNPC to capture a larger market share while building in-house capacity and increasing brand recognition globally,” Segun said.
The collaboration between NNPC LNG Ltd and NNPC Shipping Ltd in executing these LNG deliveries has bolstered NNPC Shipping’s standing as a world-class provider in the LNG shipping sector. Panos Gliatis, Managing Director of NNPC Shipping, expressed the company’s ambition to expand its shipping portfolio, including the acquisition of owned vessels, to offer greater flexibility to both its sister companies and other clients.
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, with additional orders anticipated before the year’s end, according to NNPC.
