The Nigerian National Petroleum Company Limited (NNPC Ltd) has announced a significant expansion in its Liquefied Natural Gas (LNG) operations by commencing shipments to Japan and China on a Delivered Ex-Ship (DES) basis. This move marks a new chapter in NNPC’s growing presence in the global LNG market.
NNPC Ltd achieved this milestone through the collaboration of its subsidiaries, NNPC LNG Ltd and NNPC Shipping Ltd. The first DES LNG cargo was successfully delivered from the 174,000m³ LNG vessel *Grazyna Gesicka* at Futtsu, Japan, on June 27, 2024. Building on this achievement, NNPC has since extended its reach to China, with the delivery of an additional LNG cargo under the same terms.
The DES shipping arrangement is a significant step up in complexity and responsibility for the company. Unlike the Free on Board (FOB) system, where the buyer takes responsibility once the goods are on board the vessel, DES requires the seller to handle all aspects of transportation and insurance until the goods reach the specific port of delivery. This system not only demands greater expertise and operational efficiency but also allows for better market positioning and potentially higher financial returns.
Since its entry into LNG trading in 2021, NNPC Ltd has traded over 20 LNG cargoes to European and Asian markets on an FOB basis. The shift to DES marks a strategic enhancement in NNPC’s capabilities and market engagement.
Mr. Dapo Segun, Executive President of NNPC Downstream, highlighted the advantages of this approach: “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.”
The collaboration between NNPC LNG Ltd and NNPC Shipping Ltd in executing these LNG deliveries on a DES basis has also bolstered NNPC Shipping Ltd’s reputation as a leading shipping provider in the LNG sector. “NNPC Shipping intends to build a shipping portfolio, including owned vessels, to provide our sister company and other clients with all the shipping flexibilities they need,” said Panos Gliatis, Managing Director of NNPC Shipping.
Looking ahead, NNPC LNG Ltd, in partnership with NNPC Shipping Ltd, plans to deliver at least two more LNG cargoes to the Asian market on a DES basis by November. Several more orders are anticipated before the year ends, signaling continued growth and expansion in this strategic sector.
This development marks NNPC’s continued evolution as a key player in the global energy market, with its focus on enhancing operational capabilities and expanding its reach to new markets.
