NNPCL Expands LNG Market with Shipments to Japan, China

The Nigerian National Petroleum Company Limited (NNPCL) has begun shipping Liquefied Natural Gas (LNG) cargoes to Japan and China on a Delivered Ex-Ship (DES) basis, marking a significant expansion of its presence in the global energy market.

In a statement released on Monday, NNPCL’s spokesperson, Olufemi Soneye, announced that the company successfully executed its first DES LNG delivery from the 174,000m³ vessel, Grazyna Gesicka, to Futtsu, Japan, on June 27, 2024.

This milestone was achieved through the collaboration of two key Downstream subsidiaries—NNPC LNG Ltd and NNPC Shipping Ltd.

Following the successful delivery to Japan, NNPCL expanded its reach to China, completing its first DES LNG shipment to the country.

Soneye highlighted that the DES system requires the seller to deliver products to a specific port, taking full responsibility for shipping and insurance until the goods reach the designated destination. This approach demands a higher level of expertise and efficiency compared to the more commonly used Free on Board (FOB) system.

“Delivered Ex-Ship (DES) is an international commercial term that requires the seller to deliver the products at a specific port,” Soneye explained. “It requires expertise and a higher level of efficiency to execute than the Free on Board (FOB) system.”

NNPCL has been actively involved in LNG trading since 2021, with its first sale occurring in November of that year. To date, the company has traded over 20 LNG cargoes in the European and Asian markets on an FOB basis. The company is set to deliver at least two more LNG cargoes to the Asian market on a DES basis by November, with additional orders expected before the year’s end.

Dapo Segun, NNPCL’s Executive Vice President of Downstream, emphasized the financial advantages of the DES system and its strategic importance for the company.

“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,” Segun stated.

Panos Gliatis, Managing Director of NNPC Shipping, added that the company intends to build a robust shipping portfolio, including owning vessels to provide greater flexibility to NNPC’s operations and other clients.