The Nigerian National Petroleum Company Limited (NNPC) 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 the company’s efforts to establish itself as a reliable global energy supplier.
In a statement released by NNPC spokesman Olufemi Soneye, the Downstream Executive President of NNPC, Segun Dapo, announced the new development on Monday. Dapo highlighted that this move aligns with NNPC’s strategic vision to expand its reach in the global energy market and strengthen its position as a key player in the LNG sector.
“The transition to a DES system is not only more financially rewarding for NNPC Ltd., but it also allows us to penetrate deeper into the downstream segment of the LNG market,” Mr. Dapo said. He explained that the DES model, which requires the seller to deliver the LNG cargo directly to a specific port, offers greater control and higher profitability compared to the traditional Free-On-Board (FOB) system. Under DES, NNPC assumes full responsibility for shipping and insurance, ensuring the safe and efficient delivery of LNG to its international customers.
Mr. Dapo further elaborated that NNPC achieved this milestone through collaboration with two of its downstream subsidiaries, NNPC LNG Ltd. and NNPC Shipping Ltd. He noted that the first DES LNG cargo was successfully delivered from the 174,000m³ LNG vessel, Grazyna Gesicka, to Futtsu, Japan, on June 27, 2024. Following this success, NNPC has expanded its reach to China, delivering an additional LNG cargo on a DES basis.
“Since entering the LNG trading market in 2021 with our first LNG cargo sale in November of that year, NNPC Ltd. has successfully traded over 20 cargoes across the European and Asian markets on an FOB basis. The shift to DES trading is a strategic move that will enable us to capture a larger market share, build in-house capacity, and increase global brand recognition for NNPC Ltd.,” Mr. Dapo explained.
The collaboration between NNPC LNG Ltd. and NNPC Shipping Ltd. has also bolstered NNPC Shipping’s reputation as a world-class shipping provider within the LNG sector. Panos Gliatis, Managing Director of NNPC Shipping, emphasized the company’s commitment to expanding its shipping portfolio, including the acquisition of owned vessels, to provide NNPC and other clients with the shipping flexibility needed to thrive in the competitive LNG market.
“NNPC Shipping is dedicated to building a robust shipping portfolio that will not only support our sister companies but also cater to the needs of a broader clientele in the global LNG market,” Mr. Gliatis said.
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. With the continued success of these operations, NNPC anticipates more orders before the year’s end, further solidifying its presence in the global LNG market.
