By Aduragbemi Omiyale
The Nigerian National Petroleum Company (NNPC) Limited has commenced the supply of Liquefied Natural Gas (LNG) to Japan and China.
In a statement signed by its spokesman on Monday, Mr Olufemi Soneye, the oil firm explained that the product was supplied to the countries on a Delivered Ex-Ship (DES) basis, an international commercial term that requires the seller to deliver the products/goods at a specific port.
The seller takes responsibility for the shipping and insurance for the products/goods until they get to the specified port of delivery. It requires expertise and a higher level of efficiency to execute than the Free on-board (FOB) system.
It stated that this development aligns with its strategic vision to be a dynamic and reliable global energy supplier of choice, noting that this feat was achieved through the collaboration of two of its downstream subsidiaries – NNPC LNG Limited and NNPC Shipping Limited.
The statement further disclosed that the first DES LNG cargo was delivered on June 27, 2024, from the 174,000m³ LNG vessel Grazyna Gesicka at Futtsu, Japan.
NNPC LNG, in collaboration with NNPC Shipping, is scheduled to deliver at least two more LNG cargoes to the Asian market on a DES basis by November, with more orders expected before the end of the year, the state-owned oil company disclosed.
“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,” the Managing Director of NNPC Shipping, Mr Panos Gliatis, said.
On his part, the Executive Vice President for Downstream at NNPC, Mr Dapo Segun, said: “The DES system, apart from being more financially rewarding, allows NNPC 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 Brand.”
NNPC has been involved in LNG trading since 2021 with its first LNG cargo sale in November of that year. It has since traded over 20 cargoes into the European and Asian markets on an FOB basis.