The Nigerian National Petroleum Company Limited (NNPC Ltd) has commenced the shipment of Liquefied Natural Gas (LNG) cargoes to Japan and China on a Delivered Ex-Ship (DES) basis, marking a significant milestone in its strategic vision to become a dynamic and reliable global energy supplier, Okay.ng reports.
In a statement released by the company’s Chief Corporate Communications Officer, Olufemi Soneye, NNPC Ltd announced that this achievement was made possible through the collaboration of its two Downstream subsidiaries – NNPC LNG Ltd and NNPC Shipping Ltd. The first DES LNG cargo was delivered from the 174,000m³ LNG vessel Grazyna Gesicka at Futtsu, Japan, on June 27, 2024.
Following this initial success, NNPC Ltd has expanded its footprint into the Chinese market with the delivery of an additional LNG cargo on a DES basis.
Delivered Ex-Ship (DES) is an international commercial term where the seller is responsible for shipping and insuring the goods until they reach a specified port of delivery.
This system requires a higher level of expertise and efficiency compared to the Free on Board (FOB) system, as it involves greater control and management by the seller.
NNPC Ltd has been engaged in LNG trading since 2021, with its first LNG cargo sale taking place in November of that year. Since then, the company has traded over 20 LNG cargoes into the European and Asian markets, primarily on an FOB basis.
Commenting on this development, Dapo Segun, Executive President of NNPC Downstream, highlighted the financial benefits and strategic advantages of the DES system.
“The DES system, apart from being more financially rewarding, allows NNPC Ltd inroads into the downstream segment of the LNG sector and positions it to capture more market shares while building in-house capacity and ensuring that global customers are familiar with the NNPC Ltd brand,” he said.
The collaboration between NNPC LNG Ltd and NNPC Shipping Ltd in executing these LNG deliveries on a DES basis has reinforced NNPC Shipping’s status as a world-class provider in the LNG sector. Panos Gliatis, Managing Director of NNPC Shipping, expressed the company’s ambitions:
“NNPC Shipping intends to build a shipping portfolio (including owned vessels) so that we can provide our sister company and other clients all the shipping flexibilities they need.”
NNPC LNG Ltd, in partnership with NNPC Shipping Ltd, is set to deliver at least two more LNG cargoes to the Asian market on a DES basis by November 2024, with many more orders expected before the end of the year.
