Abuja, Nigeria – The Nigerian National Petroleum Corporation Limited (NNPCL) has started the supply of Liquefied Natural Gas (LNG) to the Asian markets of China and Japan on a Delivered Ex-Ship (DES) basis.
DES is an international commercial term that requires the seller to deliver the products or goods at a specified port. The seller is responsible for the shipping and insurance of the products or goods until they reach the specified port of delivery. This process demands greater expertise and a higher level of efficiency compared to the Free On Board (FOB) system.
Spokesperson of the NNPCL, Olufemi Soneye, in a statement released on Monday in Abuja, stated that the development aligns with the corporation’s strategic vision to be a dynamic and reliable global energy supplier of choice. He explained that the achievement was made possible through the collaboration of two of its downstream subsidiaries, NNPC LNG Limited and NNPC Shipping Limited.
According to Soneye, the first DES LNG cargo was delivered from the 174,000m³ LNG vessel Grazyna Gesicka at Futtsu, Japan, on 27th June, 2024. He added that, since then, the company has expanded its footprint to China with the delivery of one LNG cargo on DES basis.
The state-owned oil company disclosed that the NNPC LNG, in collaboration with NNPC Shipping, is scheduled to deliver at least two more LNG cargoes to the Asian market on a DES basis by November 2024, with additional orders anticipated before the end of the year. The statement also noted that NNPCL has been involved in LNG trading since 2021, with its first LNG cargo sale in November of that year. Since then, the company has traded over 20 LNG cargoes into European and Asian markets on a Free On Board (FOB) basis.
In his own words, the Executive Vice President for Downstream at NNPC, Mr Dapo Segun, said: “The DES system, apart from being more financially rewarding, allows NNPC 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 Brand.”
Also speaking on the development, the Managing Director of NNPC Shipping, Panos Gliatis said “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.”
Nigeria’s shift from oil to gas in its energy sector has been a long-term strategy, driven by the country’s vast gas reserves, which far exceed its crude oil reserves. This transition has gained further momentum under President Tinubu, who has implemented new executive orders to strengthen the gas industry. As part of these efforts, President Tinubu recently inaugurated three gas plants in Delta and Imo States, aiming to increase the country’s gas production by at least 25%.
