In a significant step towards reinforcing its position as a global energy leader, Nigerian National Petroleum Company Limited (NNPC Ltd.) has successfully commenced the delivery of Liquefied Natural Gas (LNG) to Japan and China on a Delivered Ex-Ship (DES) basis.
The inaugural DES delivery was made by the 174,000m³ LNG vessel, Grazyna Gesicka, which arrived at Futtsu, Japan, on June 27, 2024. This marks a milestone for NNPC Ltd. as it extends its market reach into Asia, further solidifying its presence in the global LNG sector.
The DES system, known for its complexity and the higher level of responsibility it places on the seller, contrasts with the more common Free on Board (FOB) system. By adopting the DES approach, NNPC Ltd. not only assumes the costs and risks associated with shipping and insurance but also enhances its market competitiveness and operational capacity.
Since entering the LNG market in 2021, NNPC Ltd. has successfully traded over 20 cargoes, primarily on an FOB basis. However, the shift to DES represents a strategic move to capture more market share and expand its influence in the downstream LNG sector.
“The DES system is not only more financially rewarding but also positions NNPC Ltd. to strengthen our brand and build in-house capacity,” said Mr. Dapo Segun, Executive Vice President, Downstream.
NNPC Ltd.’s collaboration between its subsidiaries, NNPC LNG Ltd. and NNPC Shipping Ltd., has been pivotal in executing these LNG supplies. The Managing Director of NNPC Shipping, Panos Gliatis, emphasized the company’s commitment to expanding its shipping portfolio, including owned vessels, to meet the growing demands of global clients.
Looking ahead, NNPC LNG Ltd. and NNPC Shipping Ltd. plan to deliver at least two more LNG cargoes to the Asian market by November 2024, with expectations of additional orders by year-end.
Olufemi Soneye, Chief Corporate Communications Officer, NNPC Ltd.
