NNPC begins LNG shipments to Japan, China on DES basis

The Nigerian National Petroleum Company Limited (NNPC) has started shipping Liquefied Natural Gas (LNG) to Japan and China under the Delivered Ex-Ship (DES) arrangement.

NNPC’s spokesperson, Olufemi Soneye, announced on Monday that this milestone was achieved through collaboration between two of its downstream subsidiaries, NNPC LNG Ltd and NNPC Shipping Ltd.

The first DES LNG cargo was delivered from the 174,000m³ LNG vessel, Grazyna Gesicka, at Futtsu, Japan, on June 27, 2024. Following this, NNPC expanded its operations to China by delivering another LNG cargo.

The DES basis is an international shipping term where the seller is responsible for delivering goods to a specified port, covering shipping and insurance costs until the goods reach the port. This method requires more expertise and efficiency compared to the Free on-board (FOB) system.

Since it entered into LNG trading in 2021, with the first cargo sale in November of that year, NNPC Ltd has traded over 20 LNG cargoes in the European and Asian markets on an FOB basis.

Commenting on the development, Dapo Segun, Executive President of NNPC’s Downstream sector, noted that the DES system is not only more financially rewarding but also allows NNPC Ltd to enter the downstream segment of the LNG sector. This strategy helps NNPC capture more market share while enhancing its brand recognition globally.

NNPC Shipping Ltd, through its partnership with NNPC LNG Ltd, has bolstered its reputation as a leading shipping provider in the LNG sector. Managing Director of NNPC Shipping, Panos Gliatis, emphasized the company’s goal to develop a comprehensive shipping portfolio, including owned vessels, to provide flexible shipping solutions to both NNPC’s sister company and other clients.

Looking ahead, NNPC LNG Ltd, in collaboration with NNPC Shipping Ltd, plans to deliver at least two more LNG cargoes to the Asian market on a DES basis by November, with additional orders expected before the end of the year.