State oil company, the Nigerian National Petroleum Company Limited (NNPCL) has commenced shipment of Liquefied Natural Gas (LNG) cargoes to Japan and China on a Delivered Ex-Ship (DES) basis.
This was made possible through the collaboration of two of its Downstream subsidiaries – NNPC LNG Ltd and NNPC Shipping Ltd.
Under this agreement, DES LNG cargo from the 174,000m³ LNG vessel was delivered to Grazyna Gesicka at Futtsu, Japan, on 27th June 2024.
This development was announced in a statement on Monday by the spokesman for the company, Olufemi Soneye.
He explained that since then, the company has expanded its footprint to China with the delivery of one LNG cargo on a DES basis.
“Delivered Ex-Ship (DES) is an international commercial term that requires the seller to deliver the products/goods at a specific port.
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“The seller takes responsibility for the shipping and insurance for the products/goods until they get to the specified port of delivery. It requires expertise and a higher level of efficiency to execute than the Free on Board (FOB) system,” Soneye said.
The spokesman said the company has been involved in LNG trading since 2021 with its first LNG cargo sale in November of that year. It has since traded over 20 cargoes into the European and Asian markets on an FOB basis.
He said NNPC LNG Ltd, in collaboration with NNPC Shipping Ltd, is scheduled to deliver at least two more LNG cargoes to the Asian market on a DES basis by November. More orders are expected before the end of the year.
The Executive Vice President, of Downstream, Dapo Segun, said, “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.
“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,” Managing Director of NNPC Shipping, Panos Gliatis, enthused.
By Babajide Okeowo
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