The Nigerian National Petroleum Company Limited (NNPCL) has commenced shipment of Liquefied Natural Gas (LNG) cargoes to Japan and China on Delivered Ex-Ship (DES) basis.
Delivered Ex-Ship (DES) is an international commercial term that requires the seller to deliver the products/goods at a specific port to the buyer and the seller takes responsibility for the shipping and insurance of the products/goods until they get to the specified port of delivery.
The DES requires technical expertise and a higher level of efficiency to execute than the Free on Board (FOB) system.
The company’s LNG market expansion to the two countries is being facilitated by two of its downstream subsidiaries, namely NNPC LNG Limited and NNPC Shipping Limited, with the delivery of its first DES LNG cargo from the 174,000m³ LNG vessel Grazyna Gesicka at Futtsu, Japan, on 27th June this year.
Subsequently, it delivered LNG to China with the delivery of one LNG cargo on DES basis.
Speaking on the expanded market for the company’s LNG delivery, the NNPCL’s Executive President, Downstream, Mr. Adedapo 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.”
In his remarks, the Managing Director of NNPC Shipping, Panos Gliatis, projected: “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.”
The two subsidiaries of the NNPCL are scheduled to deliver at least two more LNG cargoes to the Asian market on DES basis between now and November even as the management is expecting more orders before the end of year.
It would be recalled that NNPCL had been involved in LNG trading since 2021, with its first LNG cargo sale in November of that year. The company delivered over 20 cargoes into European and Asian markets on FOB basis.
