NNPC commences LNG export to Japan, China

The Nigerian National Petroleum Company (NNPC) Limited says it has commenced the shipment of liquefied natural gas (LNG) cargoes to Japan and China on a delivered ex-ship (DES) basis.

Delivered ex-ship (DES) is an international commercial term that requires the seller to deliver the products or goods at a specific port.

The seller takes responsibility for the shipping and insurance for the products or goods until they get to the specified port of delivery.

According to a statement on Monday by Olufemi Soneye, chief corporate communications officer at NNPC, this is in line with its strategic vision to be a dynamic and reliable global energy supplier of choice.

NNPC said this milestone was achieved through the collaboration of two of its downstream subsidiaries – NNPC LNG Limited and NNPC Shipping Limited – which delivered its first DES LNG cargo from “the 174,000m³ LNG vessel, Grazyna Gesicka at Futtsu, Japan, on June 27”.

“Since then, it has expanded its footprint to China with the delivery of one LNG cargo on DES basis,” NNPC said.

NNPC said it has been involved in LNG trading since 2021, with its first LNG cargo sale occurring in November of that year.

The national oil company said since then, it has traded over 20 cargoes into the European and Asian markets on free on board (FOB) basis.

In a FOB transaction, the buyer assumes all risk once the seller ships the product.

Speaking on the development, Dapo Segun, executive vice-president of downstream at NNPC, said the DES system is more financially beneficial and enables NNPC to expand its presence in the downstream segment of the LNG industry.

“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,” Segun said.

Also, commenting on the transaction, Panos Gliatis, managing director of NNPC Shipping, said the shipping arm of the national oil company 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 statement said the collaboration between NNPC LNG and NNPC Shipping in executing the LNG supplies on a DES basis has strengthened NNPC Shipping’s position as a world-class shipping provider in the LNG sector.

NNPC said both companies are scheduled to deliver at least two more LNG cargoes to the Asian market on a DES basis by November, with more orders expected before the end of the year.