The Nigerian National Petroleum Company Limited (NNPC Ltd.) has successfully expanded its Liquefied Natural Gas (LNG) operations into the Asian markets of Japan and China. This milestone was achieved through the delivery of LNG cargoes on a Delivered Ex-Ship (DES) basis, marking a significant step forward in NNPC Ltd.’s vision to become a leading global energy supplier.
The first DES LNG cargo, transported by the 174,000m³ LNG vessel Grazyna Gesicka, arrived at Futtsu, Japan, on June 27, 2024. This historic delivery was followed by the successful expansion of NNPC Ltd.’s market footprint into China, where another LNG cargo was delivered on a DES basis.
The DES system, a more complex and financially rewarding international commercial term compared to the traditional free-on-board (FOB) system, requires the seller to handle all logistics, including shipping and insurance, until the cargo reaches the specified port of delivery. This strategic shift allows NNPC Ltd. to gain deeper access to the downstream segment of the LNG sector, enhance market share, and establish its brand in the global market.
Dapo Segun, the Executive Vice President of NNPC Ltd.’s Downstream division, highlighted the importance of this achievement, stating, “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.”
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The successful execution of these deliveries was made possible through the collaboration between NNPC LNG Ltd. and NNPC Shipping Ltd. The latter has played a crucial role in strengthening NNPC Ltd.’s position as a world-class shipping provider within the LNG sector. Panos Gliatis, Managing Director of NNPC Shipping, emphasized the company’s future ambitions, saying, “NNPC Shipping intends to build a shipping portfolio (including owned vessels) so that we can provide our sister company and other clients all the shipping flexibilities they need.”
As part of its aggressive market expansion, NNPC LNG Ltd., in collaboration with NNPC Shipping Ltd., is set to deliver at least two more LNG cargoes to the Asian market on a DES basis by November 2024, with additional orders expected before the year’s end.
