The Nigerian National Petroleum Company Limited (NNPC Ltd.) has announced a major expansion of its global energy footprint with the commencement of Liquefied Natural Gas (LNG) shipments to Japan and China on a Delivered Ex-Ship (DES) basis.
This milestone reflects NNPC Ltd.’s strategic push to enhance its global presence and operational capabilities.
A statement on Monday by Olufemi Soneye, Chief Corporate Communications Officer, NNPC Ltd., revealed that the first DES LNG cargo was delivered on June 27, 2024, to Futtsu, Japan, using the 174,000m³ LNG vessel, Grazyna Gesicka.
Following this, NNPC Ltd. extended its reach to China with another DES LNG delivery.
The DES system requires the seller to manage shipping and insurance costs until the cargo reaches the designated port, offering a higher level of operational responsibility compared to the Free on Board (FOB) system.
Since entering the LNG trading market in November 2021, NNPC Ltd. has sold over 20 cargoes to European and Asian markets under the FOB system. The shift to DES is expected to bolster profitability and market share while enhancing in-house capabilities.
Mr. Dapo Segun, Executive Vice President of Downstream at NNPC Ltd., emphasized the significance of the DES system: “The DES system not only offers greater financial rewards but also facilitates our entry into the downstream LNG sector, enabling us to capture a larger market share while promoting the NNPC Ltd. brand globally.”
The collaboration between NNPC LNG Ltd. and NNPC Shipping Ltd. has further strengthened NNPC Shipping Ltd.’s position as a leading player in the LNG shipping sector. Panos Gliatis, Managing Director of NNPC Shipping, highlighted the company’s strategic plans: “We aim to build a comprehensive shipping portfolio, including owned vessels, to offer maximum flexibility to our sister company and other clients.”
Looking ahead, NNPC LNG Ltd., in partnership with NNPC Shipping Ltd., is set to deliver at least two more LNG cargoes to the Asian market on DES basis by November 2024, with additional orders expected before the year’s end.